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.

• 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.

• 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.

• 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.

• 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.

• 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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The post Surface Transportation News: Priced managed lanes rebound from pandemic, vehicle electrification concerns, and more appeared first on Reason Foundation.

• How “citizen voice” helped triple the cost of Interstates
• Canada points the way on modernized highway rest areas
• Truck automation developers take on tough problems
• Bus yard P3 captures value for transit
• Metro Silver Line to Dulles Airport: the truth comes out
• Countering the “freeway fighters”
• News Notes
• Quotable Quotes

New Study Documents the Impact of “Citizen Voice” on Highway Construction

Economists have documented that the real cost per mile of constructing Interstate highways tripled between the 1960s and 1980s. A study by Leah Brooks of George Washington University and Yale University’s Zachary Liscow looks into what factors led to this increase—and suggests that the rise of “citizen voice” seems to have played a key role.

Their 2019 research digitized annual state-level construction spending per mile of Interstate from 1956 to the 2010s. The major cost increase was in place by the 1980s. The report finds that it was not due to increases in the costs of labor or materials during those years. What did increase dramatically was real per-capita income and housing prices, which suggests that more-affluent households demanded more expensive highways (e.g., noise walls) and/or were more effective at “voicing their interests in the political process” in the post-70s era. Among their findings on this is that land-use litigation explains about a quarter of the increase in costs.

A key factor in enabling “citizen voice” to affect the construction of Interstate highways was the 1970 National Environmental Policy Act (NEPA) which requires environmental reviews of projects with significant federal funding. But it was not just the statute itself. In 1971, the Supreme Court ruled (in Citizens to Protect Overland Park v. Volpe) that citizens could sue administrative agencies over environmental impacts. Brooks and Liscow don’t discuss the cost of lengthy delays imposed by ever-more-complex environmental reviews, but those delays (assuming the project eventually gets approval to be built) do add to its cost. Their focus is on the high cost of changes to highway design that result from such litigation, for which they find empirical evidence.

Besides presenting statistical data on the increased use of noise walls, circuitous routing, elevated and depressed sections, and more on- and off-ramps, they also illustrate with a case study. I-696 in Detroit was built in two sections, the first in the 1960s and the second in the 1980s, at three times the cost per mile. The latter faced “decades of opposition” from citizen groups, leading to a final design that depressed the entire leg and built three 700-foot-long plazas decking over the highway, plus noise walls along most of its length.

Brooks and Liscow do not argue that these kinds of changes were unwarranted. One can argue that the initial Interstates imposed negative externalities on adjacent areas that were not compensated for those bearing the burdens. The question many thoughtful commentators are now asking is whether the empowerment of endless litigation by opponents of projects has gone too far, sometimes killing beneficial infrastructure improvements in transportation and energy infrastructure.

Back in March, Ezra Klein had a lengthy opinion piece in the New York Times along these lines, as did Jerusalem Demsas in The Atlantic. Even legislators in deep blue California have begun questioning the state’s version of NEPA (CEQA) for preventing new housing and green infrastructure projects.

No one is arguing for the repeal of NEPA or CEQA. The question is whether citizen-voice litigation has gotten out of control. The noteworthy Transit Costs Project at New York University’s Marron Institute has found that those European countries with significantly less-costly transit megaprojects have little or no citizen litigation but have strong environmental review laws. If we ever get back to bipartisan federal policymaking, there might be a critical mass of support for reforming NEPA, as a compromise between advocates of needed energy infrastructure (high-voltage transmission lines, solar power fields, pipelines) and advocates of needed transportation infrastructure (highways, transit, and occasionally airport runways).

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Canada Points the Way on P3s for Modernized Highway Rest Areas

Inframation News (Aug. 10, 2022) reported that Alberta Transportation (the province’s transportation agency) has issued a Negotiated Request for Proposals (NRFP) for the development and operation of Commercial Safety Rest Areas along its major highways. Proposals are due Jan. 9, 2023, and a shortlist will be announced in March, with preferred proponent(s) selected in April.

Like the United States, Canada has minimally-equipped rest areas, and in Alberta the majority “have low utilization by the traveling public due to a lack of amenities and inadequate washroom facilities,” according to the NRFP. The agency envisions a long-term public-private partnership (P3) lease agreement with one or more proponents for the 18 rest areas to be redeveloped. Potential commercial services include car and truck fuel, electric vehicle (EV) charging, convenience store, and quick-service restaurant facilities.

This sounds a lot like what U.S. toll roads have been doing over the past decade or so. As I documented in a March 2021 Reason policy study, six major toll roads (including Florida’s Turnpike, the Indiana Toll Road, and the New York Thruway) have entered into 30-35-year P3 leases to redevelop their service plazas, contracting with commercial providers such as HMS Host and Areas USA. These are basically design-build-finance-operate-maintain revenue-risk (DBFOM) P3s in which the private partner finances and rebuilds the facilities based on the projected revenues over the term of the lease agreement (with some revenue shared with the toll road owner). Private investment in these projects ranges from double-digit millions for smaller toll roads to $450 million for the New York Thruway’s 27 service plazas.

This would be an appealing proposition to many state DOTs, which lack any dedicated revenue source to maintain or redevelop their minimal-service Interstate highway rest areas. That’s because providing commercial services at those rest areas is still illegal under a 62-year-old statute that bans commercial services at those rest areas (but exempts toll roads). That ban has only two supporters: the American Trucking Associations (ATA) and the National Association of Truck Stop Operators (NATSO). By contrast, the Owner-Operator Independent Driver Association (OOIDA) has long supported repealing this archaic ban.

There are two urgent reasons to repeal the ban (which is in Section 111 of Title 23 of the U.S. Code): the growing shortage of safe overnight parking for long-distance trucking and the need for electric vehicle charging on long-distance Interstates.

The ongoing growth of e-commerce means more trucks on the road than ever before. ATA and OOIDA note that for every 11 truck drivers nationwide there is only one truck parking space. Investors such as Timber Hill Group are gearing up to invest in truck parking, but they can’t do that at Interstate rest areas due to the federal ban. Truck parking is particularly tight along major freight corridors, David Heller of the Truckload Carriers Association told TransportDive back in May. State transportation departments cannot afford to expand their Interstate rest areas, but investors might well be willing to do so, if that became legal.

The other need is for electric vehicle charging facilities on long-distance Interstates. In public comments on the Federal Highway Administration’s (FHWA) new $5 billion program to help states pay for adding EV charging “along” (i.e., within one mile of) rural Interstates, a number of state DOTs have asked for waivers so they could install EV charging facilities as those rest areas, owned and operated by private companies, not the state. The trucking industry wants far more powerful EV chargers for its big rigs, ideally rated at over 1 MW vs. 350 KW suggested in the federal guidelines. That’s more than they are likely to get, unless it’s part of an investor-financed P3 that would make the most sense to be located at Interstate rest areas.

One of these days, ATA and NATSO are going to have to bite the bullet and concede that the 62-year-old ban on commercial services has outlived its usefulness. Meanwhile, it will be interesting to see what happens in Alberta. Will U.S.-based Flying J (a NATSO member in good standing) join a consortium to bid on Alberta commercial-service rest area modernization?

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Truck Automation Developers Take on Tough Problems
By Marc Scribner

Last month’s issue discussed the continued progress and challenges with heavy truck automation (“Autonomous Trucks Making Progress—But Aren’t There Yet”). While “we are not yet ready for fully autonomous commercial service,” developers appear to be increasingly focusing on the practical operational issues that must be addressed prior to commercial deployment, including emergency fallback, interactions with first responders, and adverse weather conditions.

For an automated driving system (ADS) to qualify as Level 4 as defined by SAE International’s consensus standard J3016—with Level 4 being the level of automation at which human operators can be eliminated (in certain operational design domains)—the ADS must be capable of automatically performing a fallback to a minimal risk condition (i.e., “a stable, stopped condition”) in the event of an ADS failure. In May, a leading developer of Class 8 Big rig automation, Kodiak Robotics, announced it was deploying such functionality in its test vehicles. “There’s over 1,000 metrics the truck is constantly monitoring many times per second,” Kodiak CEO Don Burnette told Forbes. “If anything becomes abnormal, if there’s any diagnostic that triggers, then the Fallback kicks in and is safely able to bring the truck to a safe stop on the side of the road; then that system can ask for help remotely from our remote operations.”

But once ADS-equipped vehicles are stopped, they may not be able to resume operation with the assistance of a remote operator, as Burnette says, such as after a collision or mechanical failure that renders the vehicle inoperable. In those cases, police and firefighters may be the first to respond to the scene. This raises numerous questions as to how these first responders should safely interact with a disabled ADS-equipped truck. ADS-equipped trucks will also need to be able to identify and pull over for emergency vehicles. The broader automated vehicle industry has been working on first responder interaction plans for several years and some jurisdictions now require that these plans be filed prior to on-road testing.

In late June, Embark, another developer of Class 8 truck automation, conducted a public demonstration with the Texas Department of Public Safety and Travis County Sheriff’s Office on a stretch of SH 130 outside of Austin where sheriff’s deputies successfully completed a traffic stop of an Embark truck. Emily Warren, Embark’s head of public policy, told FleetOwner that the company’s emergency vehicle interaction capability “was designed to work seamlessly within existing law enforcement workflows, without requiring new training or technology investment by first responders.”

Embark’s “Autonomous Truck Law Enforcement Interaction Procedure” provides more detail on the mechanics involved. When a law enforcement vehicle behind an Embark truck activates its lights, Embark’s ADS first alerts a remote technician to request confirmation that a traffic stop has been initiated. If the remote technician does not respond within a certain window, the ADS makes the default assumption that the truck is being pulled over and exits the roadway onto the shoulder. Decals on the outside of the truck provide an Embark support phone number, a digital display indicates whether the truck is safe to approach, and an exterior combination lockbox contains required documents such as registration, proof of insurance, and bill of lading. With the assistance of a remote technician, the law enforcement officer on the scene can be guided over the phone to complete the traffic stop. To see it in action, Embark has produced a narrated video of the SH 130 demonstration.

One of the most challenging operational hurdles facing commercial deployment of automated trucks is adverse weather. As was discussed in this newsletter in April (“Could Automation Replace Most Long-Haul Truck Drivers?”), a recent study found that restricting automated truck operations to the 11 Sun Belt states largely free of snow and ice would impact only 10% of human truck driver operator-hours in the U.S.

In May, Embark reported successful trials of its Vision Map Fusion technology conducted on snowy Montana roadways in winter 2022. On a 60-mile route between Clinton and Missoula, Embark found that its technology would allow for it to meet acceptable shipper delivery windows 90% of the time in conditions with up to one-sixth of an inch per hour snowfall and one inch of roadway snowfall accumulation. Its Vision Map Fusion technology relies heavily on cameras to account for degraded LIDAR performance during moderate snow events.

These advances show automated truck developers are serious in deploying nationwide in real-world conditions. However, much more work remains to be done for commercial deployments to be viable. One area to watch relates to emergency signals for stopped trucks. When drivers must pull their trucks over to the side of the road, federal regulations (49 C.F.R. § 392.22) require that they place warning triangles or flares 100 feet in front and behind of their trucks within 10 minutes of stopping. This poses obvious compliance problems for driverless trucks, and it is so far unclear how automated trucks will meet this requirement, among others that presume a human driver is present and capable of exiting the cab to perform necessary duties.

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Potrero Bus Yard P3 Would Capture Value for Transit
By Baruch Feigenbaum

When investors examine public-private partnership opportunities, they don’t typically consider California the land of opportunity. While the State Route 91 express toll lanes project in Orange County was the first transportation P3 in the country, the Golden State has been in a dry spell. Most P3 projects in California have several challenges to overcome. Complicated environmental rules make building any piece of infrastructure challenging. And the Professional Engineers in California Government (PECG), the union for Caltrans engineers, has fought most P3s like they’re an existential threat.

However, California’s self-help counties (with their own dedicated transportation sales taxes) have been more adept at navigating environmental rules. And PECG does not represent their employees. Los Angeles Metro converted the I-10 and I-110 high-occupancy vehicle lanes to high-occupancy toll lanes using a design-build-operate-maintain (DBOM) P3. And the San Francisco Municipal Transportation Agency (SFMTA, also known as MUNI) is in the process of procuring the Potrero Bus Yard project, one of the most innovative P3 transit projects to date.

Built in 1915, the Potrero Bus Yard is situated on 4.4 acres. SFMTA maintains six bus routes that served 100,000 MUNI customers (2019 pre-COVID number) from the yard. Originally operated as a streetcar facility, the yard can accommodate 138 40-foot and 60-foot buses. However, MUNI is transitioning to an electric vehicle fleet. And the building, which is more than 100 years old, has long been obsolete; it does not meet current seismic or safety standards. Given the city’s density, SFMTA cannot expand the size of the yard or find new land to build a new facility. Therefore, SFMTA needs to modernize the facility to accommodate electric vehicles.

In 2019, SFMTA announced the Potrero Yard Modernization Project P3 that will replace the two-story maintenance building and bus yard with a modern, three-story, efficient bus maintenance and storage garage. In addition to modernizing the bus yard, the project is designed to address another one of San Francisco’s major problems: housing. The project adds 575 residential units of housing to the bus yard making it a rare residential/industrial mixed-use project.

The project has made steady, albeit somewhat slow, progress. In Aug. 2020, SFMTA issued a request for qualifications. In December, SFMTA shortlisted Potrero Mission Community Partners led by John Laing and Edgemoor, Potrero Neighborhood Collective led by Plenary US, and Potrero Yard Community Partners led by Fengate. In April 2021, the agency issued a request for proposals. In Jan. 2022, teams responded to the RFP and in June SFMTA requested revised proposals from the teams led by John Laing and Edgemoor as well as the team led by Plenary.

Most importantly, the political establishment is behind the project. The San Francisco Board of Supervisors approved a special exemption from the city’s administrative codes and voted to advance the project.

In many ways, a bus yard is the ideal 2022 transit public-private partnership project. Compared to its pre-COVID-19 numbers, rail ridership has dropped by as much as 70% while bus ridership is only down 40%. And those buses need some place to be stored overnight and maintained. Even in the six legacy rail cities (Chicago, Boston, New York City, Philadelphia, San Francisco, Washington D.C.) a far higher percentage of commuters have returned to buses compared with rail. This trend is partly because transit-dependent riders, who are more likely to use buses, tend to have occupations, such as store clerk or machinist, that require a physical presence. Transit-choice riders, who are more likely to use trains, are more likely to have jobs that allow them to work from home at least part of the time. Given that federal funds incentivize construction rather than the maintenance of transit lines, local operators need to maximize the use of innovative financing for bus maintenance.

But there are two other non-transportation reasons why these projects are likely be attractive. The first is environmental. Many transit agencies are converting their buses from internal combustion engines run on diesel to battery-electric power. While buses powered by electricity are problematic in very hot climates, many cities including San Francisco don’t have to worry about these types of weather challenges. The federal government is also incentivizing the purchase of electric buses with the Infrastructure Investment and Jobs Act’s $10.25 billion Grants for Buses and Bus Facilities Formula Program. Many environmentalists who do not traditionally support transportation projects, see this P3 as an opportunity to increase the share of electric vehicles. Others are happy to support any program that does not expand roadway capacity.

The second group supporting the project is advocates for more housing. The median price of a house in San Francisco is around $1.5 million. The average rent for a one-bedroom apartment is about $3,600 per month. The P3 requires the winning bidder to build half of the 575 residential units being added to the yard as “affordable” to those with moderate income. And while the 575 overall units are a drop in the bucket of needed housing in the area, building more of these projects across the city and the whole Bay Area, in addition to some needed zoning reforms, could start to create enough new housing to make a difference. Often, advocates for low-income housing do not support P3s. But a P3 that builds affordable housing in the most expensive major city in the country is too good to ignore.

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Metro Silver Line to Dulles Airport—the Truth Comes Out

Many years ago the cost of extending the new Silver Line heavy rail project to Dulles International Airport and beyond appeared to be well beyond the funds available to the Washington Metropolitan Area Transit Authority, the regional transit agency that runs the Washington, D.C., metro system. The alternative analysis that WMATA prepared was criticized for stacking the deck in favor of heavy rail by only assessing bus rapid transit-lite and no-build as alternatives. An obviously more cost-effective alternative would have been adding express toll lanes to the Dulles Toll Road and offering express bus service on them. It was also believed by knowledgeable transportation observers that the Federal Transportation Administration scoring of WMATA’s request for grant funds was fudged so as to make a poor project eligible for funding.

But a complete funding package for the massive $4 billion heavy rail project was still unresolved in 2005. Under Virginia’s pioneering Public-Private Transportation Act of 1995, the Virginia Department of Transportation (VDOT) accepted unsolicited proposals from potential private partners (such as the 2002 proposal for what became the I-495 express toll lanes P3). As a means of covering Virginia’s likely share in the Silver Line project, VDOT was open to “asset recycling” P3 proposals for the Dulles Toll Road, in which private companies might make a large up-front payment to long-term lease the Toll Road (with promised improvements), and VDOT could use the up-front payment as part or all of its share of the Silver Line construction cost.

As Public Works Financing reported in its Nov. 2005 issue, five P3 teams made proposals. Four offered up-front payments to help pay for the Silver Line expansion: Autostrade, Haney Company, Transurban, and Cintra. A fifth proposal from developer Christopher Walker proposed adding express toll lanes to the Toll Road, I-66, and SR 28 as an alternative to extending the rail line to the airport. But the next month, aiming to pre-empt those private-finance proposals, the Metropolitan Washington Airports Authority (MWAA) proposed that it take over the Toll Road and use increased toll revenue to pay for the heavy rail project. Its aim was to be sure the Silver Line actually got built all the way to the airport. The proposal caught VDOT and the private bidders by surprise. MWAA sent its proposal not to VDOT but to the state Rail and Public Transportation Department, as well as then-Gov. Mark Warner and Gov.-elect Tim Kaine. Despite concerns over the legality of shifting the Toll Road to MWAA, Gov. Kaine in March 2006 signed an agreement that shifted the toll road and made MWAA responsible for completing the $4 billion project based on toll revenues.

The public rationale for making toll road customers pay for the rail line was that the Silver Line would get many people off the toll road because they would switch to the Silver Line to get to the airport. The deal put MWAA in charge of managing the huge construction project and the power to enact increase after increase in toll rates to pay for the escalating costs. MWAA had no experience building a rail line, and its shortcomings in project management led to construction flaws and change orders that increased the overall cost. The toll to travel the full length of the Dulles Toll Road was just $1.25 at the time the deal was signed. After many years of increases, the MWAA board in May discussed yet another increase, to $6.00.

But now, with the line close to opening at Dulles Airport, the truth about the rationale for the deal comes out. In a Washington Post interview (Aug. 27) with airport director Richard Golinowski, we find the following questions and answers:

Q: “How will the opening of the second phase of the Silver Line [to the airport] affect Dulles?”
A: “It’s going to be good for the airport. I think, ultimately, it will bring more employees to the airport than it will passengers. But that’s good. If we can get employees to the airport more easily—transporting them via public transportation rather than driving on the roads every day—I think it’s going to be good for the area.”

Q: “Why won’t more passengers use it? Is it because it’s such a long ride from downtown DC?”
A: “I don’t think it’s a time thing. I think it’s quite frankly, it’s a luggage thing. People don’t want to carry luggage on the Metro. They’d rather drive or take an Uber, take a taxi or have somebody drive them to the airport with their luggage.”

Thanks for coming clean on this, Richard. That was just as true in 2006 as it is now. A fine time to tell us.

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Countering the “Freeway Fighters”

An anti-highway group called StrongTowns.org last month released “10 Recommendations for Freeway Fighters,” described as answering the need for ammunition by those working on “the relocation or removal of highways in American cities.” Author Jay Arzu provides brief descriptions of the 10 points, which I summarize here so that state transportation departments and other members of the highway community can know what may be coming at them.

Rule #1: “Highway-to-boulevard projects should focus on neighborhood reconnection and reinvestment for current residents of the area,” Arzu writes. This seems to assume that the current residents are the same ones there when the freeway was built 40 years ago; it is mainly an argument against “gentrification”—i.e., keeping the residents in place rather than offering them buyouts so that economic development can occur (assuming the freeway is actually removed).

Rule #2: “Any plan to remove a highway must include the input of local residents, and must employ Diversity, Equity, and Inclusion in design, implementation, and construction,” StrongTowns says.
DEI is the current buzzword used by some for social planning, rather than letting residents make their own decisions on what is best for them. He also recommends letting a social-activist group speak for all the residents, rather than finding out what individuals, families, and business owners prefer.

Rule #3: “Traffic data will always be used as an excuse for why a highway shouldn’t be removed,” says Arzu. As if disrupting urban area travel patterns would have no impact on thousands or millions of other people? And commercial vehicles?

Rule 4: “Trust your city’s street grid.” Street grids can increase or restrict mobility depending on how they are configured and managed. There is nothing inherently better in whatever the current grid happens to be.

Rule 5: “Create visuals/renderings showcasing the opportunities for your city if the highway was [sic] removed.” Pretty pictures are designed to be persuasive, but they may not reflect what is actually doable or affordable.

Rule 6: “When you remove a highway, traffic will not come!” This is a mantra of the Congress for a New Urbanism, and the historic examples it cites are not removals of entire freeways but tear-downs of stubs of freeways that were never completed (e.g. the stub of Central Freeway in San Francisco and the stub of the Park Freeway in Milwaukee). Those making this argument—that if you remove capacity the traffic will disappear—also argue that the “iron law of freeway congestion” says that if you add lanes, they will quickly fill up and be congested. Neither is generally true, and one claim contradicts the other.

Rule 7: “Get the development community on your side.”
In this telling, developers are the friends of teardowns. Yet most developers want to build profitable projects (i.e., gentrify under-developed areas).

Rule 8. “Land trusts/banks are a huge asset.”
Land trusts and land banks require financial and development expertise that is unlikely to be present in “community-based organizations.” And what is left out of this recommendation is the owners of the properties in the relevant area, who probably don’t want their properties turned over to a land trust or land bank.

Rule 9: “In the long term, take control of MPOs and DOTs.”
Well, MPOs and DOTs, don’t say you weren’t warned!

Rule 10: “No highway is permanent!”
True, highways wear out and need to be rebuilt, the same as bridges, water and sewer systems, etc. His example of the removal of Harbor Drive in Portland is highly misleading since it was replaced by brand new I-5, which runs parallel to former Harbor Drive, which was turned into Waterfront Park.

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News Notes

Maryland Express Toll Lanes OK’d by FHWA
After some initial dithering that aroused fears of political stonewalling, FHWA on Aug. 26 issued its Record of Decision formally approving the final Environmental Impact Study. Sources told Reason that concerns raised by opponents about the MDOT’s traffic & revenue study were evaluated by DOT experts and found to be groundless. MDOT and the Accelerate Maryland Partners P3 coalition have been under way on preliminary work via a pre-development agreement (PDA). The consortium hopes to reach financial close on the long-term concession for the project by year-end. The $5 billion project will replace the aging American Legion Bridge on I-495, adding express toll lanes to it, which will continue northward to I-270 and extend along that Interstate to Frederick, M.D.

Puerto Rico Seeking P3 Lease of Four Toll Roads
In latest example of U.S. transportation asset recycling, the Puerto Rico Public-Private Partnerships Authority (P3A) has issued a Request for Qualifications for P3 consortia that would finance, upgrade, operate, and maintain PR-20, PR-52, PR-53, and PR-66. As with the P3 leases of the Chicago Skyway and Indiana Toll Road, the P3A seeks to maximize the upfront payment in order to reduce the outstanding debt of the state’s bankrupt Highways & Transportation Authority.

Cintra Proposes Express Toll Lanes on I-77 South of Charlotte, N.C.
North Carolina DOT has revealed the identity of the company that submitted an unsolicited proposal several months ago to add express toll lanes to I-77 from downtown Charlotte to the South Carolina border. The proposal is being reviewed by the Charlotte Regional Transportation Planning Organization (CRTPO) at NCDOT’s request. Cintra is the primary company in the consortium that financed, built, and operates express toll lanes on I-77 north of Charlotte. That project was controversial during the planning and construction phases but has delivered the traffic flow and congestion reduction that was promised. The new project will cost an estimated $2.3 billion, which Cintra has said it could finance based solely on projected toll revenues.

Macquarie Selling Its Stake in Goethals Bridge Concession
Inframation News reported last month that Macquarie Asset Management is seeking bids from potential investors in its 40-year P3 concession that replaced the aging Goethals Bridge between New Jersey and Staten Island. Macquarie is seeking to sell its 90% stake in the concession, and the likely buyers are infrastructure investment funds. Since construction was completed in 2018, there is no longer construction cost risk, and the value of the remaining years of the concession will be a function of operating and maintenance (O&M) risks. There is minimal revenue risk, since the project was financed based on availability payments from the Port Authority of New York & New Jersey, the bridge’s owner.

PennDOT Faces Bridge Replacement Funding Problem
Due to a new law that restricts new tolls on all lanes of a highway in Pennsylvania, PennDOT’s plan to use a toll-financed DBFOM P3 to replace nine major bridges on Interstate highways in the state now faces a financial problem: where to find $2.8 billion, the estimated cost of replacing the nine bridges. Thus far, the preliminary development agreement (with Bridging Pennsylvania Partners, led by Macquarie) is still in force, enabling preliminary work to continue. The P3 could still be used, financed by availability payments, but PennDOT would have to identify 40 or 50 years’ worth of funds it could dedicate to the P3—which would come from somewhere else in its budget.

New Jersey Launches MBUF Pilot Project
NJDOT is recruiting volunteers to take part in the state’s first pilot project to evaluate a mileage-based user fee replacement for its per-gallon gasoline and diesel taxes. As in other MBUF pilot projects in the eastern half of the United States, motorists will be given a device that plugs into the OBD port beneath the dashboard to record miles driven, with either a GPS or non-GPS option. That parallels the multi-state pilot project that I participated in several years ago, managed by The Eastern Transportation Coalition. In the New Jersey pilot, volunteers will receive up to $100 for completing the project.

San Francisco HOT Lanes Network Is Expanding
More high-occupancy/toll (HOT) lanes will open by the end of the year on 22 miles of US 101 between Redwood City and the San Francisco Airport (SFO). This is the second phase of a project that encompasses US 101 in both San Mateo and Santa Clara Counties. The system uses switchable transponders; with three or more people in the vehicle, there is no charge, but variable tolls are charged for two-person and one-person vehicles. Certain categories of “clean air vehicles” get discounted tolls.

Kansas and Oklahoma Shifting to Cashless Tolling
Over the next two years, the Kansas Turnpike Authority intends to eliminate cash toll payments, removing 20th-century toll booths and collecting all tolls via either KTAG transponders or license-plate imaging and billing. The Oklahoma Turnpike Authority is doing likewise, and last month completed conversion to cashless on its Chickasaw Turnpike. Already converted are the Kilpatrick, Kickapoo, and Bailey Turnpikes. The OTA completion date is 2024, the same as in Kansas.

Toll Road Widening Under Way in New Jersey
Evidently, someone didn’t clue in the New Jersey Turnpike and Atlantic City Expressway that senior officials at FHWA prefer increased maintenance to capacity additions. Gov. Phil Murphy last month approved the NJ Turnpike’s $4.7 billion plan to widen the toll road’s extension to the Holland Tunnel, a notoriously congested segment. And the toll-funded Atlantic City Expressway is planning and designing a widening project in Camden and Gloucester County.

Dubai Toll Operator Initial Public Offering
Bloomberg News reports that Salik, the company that provides toll collection services for the Dubai expressway system, is planning an initial public offering of shares in September. The company has said it hopes to raise $1 billion via the IPO.

User Cost per Mile or User Cost per Time Saved?
In a thoughtful empirical study, Robert Bain and Sylvain Senechal question the widespread use of toll charge per mile as the best measure to use in a value for money (VfM) analysis of toll roads. They suggest that this metric is not very useful, compared with measuring the value of time saved. They present data comparing these two metrics for an array of U.S. toll roads, showing that some provide poor value for the money spent by their customers. The paper, which was published in the September issue of Infrastructure Investor, is online and can be downloaded at no charge.

Automated-Only Lanes Authorized in Michigan
Gov. Gretchen Whitmer in July signed a law that allows Michigan DOT to designate some roadway lanes for autonomous vehicles only. At best, this appears to be premature. Highway lanes are costly to build and maintain, and adding such lanes when there are basically no automated vehicles (AVs) in regular use would appear to be a poor use of limited highway dollars. The alternative of converting an existing lane to AV-only poses the practical problem of shifting all the cars, trucks, and buses that currently use that lane into other lanes, increasing their congestion levels. This is also the primary drawback of converting a GP lane to a bus-only lane. Unless there is very frequent bus service with high load factors on each, the result will be fewer passenger miles per hour in the converted lane.

Possible Extension of SH 288 Express Toll Lanes
The relatively new express lanes (called the Brazoria County Expressway) on SH 288 heading south from Houston may be extended further south, eventually to Houston’s outer ring road, the Grand Parkway. The Houston Chronicle reports that county officials are looking into the feasibility of an initial extension past Meridiana.

SANDAG Moving Forward with Added Road User Charge
The San Diego Association of Governments (SANDAG) has received approval from the California Air Resources Board (CARB) of its $172 billion Regional Transportation Plan. The plan includes a highly controversial county “road user charge,” which officials admit is an added tax that will be used largely for non-highway projects. While CARB said the plan complies with air quality regulations, it asked “how, if at all, the revenue estimates in the Plan are expected to change as a result of the [SANDAG] board’s direction to remove the road user charge.” The road user tax would be in addition to the state gasoline tax and a planned state road user charge, contrary to the growing number of state pilot projects that explicitly envision such charges as replacing, rather than adding to, existing fuel taxes.

Questions for Amtrak’s Board
In a Sept. 6 opinion piece, the Eno Center for Transportation’s Jeff Davis offers three questions the U.S. Senate should ask the Amtrak board nominees. The questions all relate to Amtrak’s bizarre not-private/not-government status that enables it to operate behind closed doors in ways that neither a publicly traded business nor a government agency can do. Needless to say, these are also subjects that Congress should be addressing.

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Quotable Quotes

“The community-input process is disastrous for two broad reasons. First, community input is not representative of the local population. Second, the perception of who counts as part of the affected community tends to include everyone who feels the negative costs of development but only a fragment of the beneficiaries. . . . Even a demographically representative community meeting would systematically err on the side of blocking vital infrastructure. The downsides of new development tend to be very localized: loud noises from construction, or an obscured view. As a result, opponents can easily find one another and form a political bloc. By contrast, the beneficiaries are either unknown at the inception of the project . . . or extremely diffuse . . . . The political coalition broadly in favor of new housing, transit, and renewable energy exists, but not at the project-by-project level. This asymmetry means that opponents of a new project will always have the upper hand.”
—Jerusalem Demsas, “Community Input Is Bad, Actually,” The Atlantic, April 22, 2022

“[Amtrak has] ridership issues on many existing routes while promoting unrealistic ideas for route expansion that are likely to deepen already-existing operating losses . . . . Amtrak executives receiving huge bonuses right now only furthers Committee Republicans’ ongoing concerns with the taxpayer-subsidized passenger railroad. Amtrak has time and again shown that it isn’t a good steward of taxpayer funds, and Congress needs to ensure that going forward it uses this funding more responsibly.”
—Rep. Rick Crawford (R-AR), “Bonus Bashing,” Politico, Aug. 10, 2022

“Today the DC circuit court released its decision, siding with the Federal Communications Commission, on its reallocation of part of the 5.9GHz band. It’s a big win for the FCC and a big loss for the auto industry, which has promised to use the airwaves to improve safety through a technology called ‘vehicle-to-vehicle’ (V2V) or ‘vehicle to everything’ (V2X) communication. The problem, as hilariously put by Judge Justin Walker in his opinion, is that this technology has never really existed. It was one of those ‘just around the corner’-type innovations that has always been promised but never actually delivered. It was a fantasy, and today the court’s basically said as much.”
—Andrew J. Hawkins, “The Auto Industry Lost Its Spectrum Fight with the FCC because V2V Was Always a Fantasy,” The Verge, Aug. 12, 2022

“Let’s be clear: the work of science has nothing whatever to do with consensus. Consensus is the business of politics. Science, on the contrary, requires only one investigator who happens to be right, which means that he or she has results that are verifiable by reference to the real world. In science, consensus is irrelevant. What is relevant is reproducible results. The greatest scientists in history are great precisely because they broke with the consensus. There is no such thing as consensus science. If it’s consensus, it isn’t science. If it’s science, it isn’t consensus. Period.”
—Michael Crichton

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Correction: This post has been updated to note the ban on commercial rest areas is 62 years old, not 72.

The post Surface Transportation News: Citizen voice raises costs of Interstate construction, modernized highway rest areas, and more appeared first on Reason Foundation.

• New study quantifies value of Interstate highways
• Spurious objections to Maryland’s express toll lanes
• Texas returns to HOV lanes
• FRA re-proposes flawed crew-size mandate
• Autonomous trucks making progress—but aren’t quite there yet
• Are highway workers “pedestrians”?
• News Notes
• Quotable Quotes

New Study Quantifies Value of Interstate Highways

Economists over the years have used various methods to estimate the economic benefits of highways, especially the Interstate Highway System, which introduced a nationwide system of limited-access super-highways comparable to Germany’s autobahns and Italy’s autostrade. As econometric methods become increasingly sophisticated, it’s not surprising that recent years have brought forth new, improved studies of this sort.

The latest is a working paper from the National Bureau of Economic Research, with the rather bland title of “Highways and Globalization.” Working Paper 27938 was produced by economists Taylor Jaworski, Carl Kitchens, and Sergey Nigai. The study is a big enough deal that it was featured in a Washington Post column on July 18, “The Most Valuable Interstate Highways.”

That headline and story are a bit misleading, implying that the study’s biggest finding—of annual economic benefits of $742 billion—is the total economic value of those highways. Actually, the modeling in the paper is limited to only goods movement on the Interstate system, including trade among the 48 contiguous states and imports and exports via seaports and border crossings with Canada and Mexico.

The authors built a detailed econometric model of the flow of goods over the entire federal and state highway network, taking into account over 3,000 counties and the major seaports and international border crossings. They modeled trade flows on this network, taking into account known congestion levels and both first-best and second-best routes between origins and destinations. After calibrating the model using the entire U.S. highway system, they removed the entire Interstate highway system from the model and re-ran it. This enabled them to estimate the annual value added by the Interstate system—$602 billion in 2012 dollars, or $742 billion in 2021 dollars.

For a second counter-factual exercise, they re-ran the model 10 more times and in each run removed one of the 10 longest Interstates. Below I’ve included six of these, with the economic values updated to 2021 dollars.

Value of six major Interstates

From the table, we can see that the most productive Interstates for goods movement are I-80 and a near tie between I-70 and I-75. But in terms of trade value per mile, the productivity champs are I-75 and a near tie between I-5 and I-70.

Here are several points to keep in mind in assessing these results. First, I am not an economist, let alone an econometrician, so I cannot assess the validity of their detailed methodology. This is a working paper, so I’m sure other econometricians will be looking at the assumptions and equations and pointing out any shortcomings.

Second, these results apply only to the goods-movement function of the Interstates. Their value for personal travel—both urban and long-distance—is over and above what is estimated in this paper. And third, of course, there are one-time and ongoing externality costs of the Interstates, as highway critics keep reminding us. Comparing total annual benefits with total annual costs is not part of this paper, but my guess is that the total benefits far outweigh the total costs.

There is also the question of value for money. The cost of building the Interstates is reported as $114 billion, equivalent to $535 billion in 2020 dollars. For the system to yield economic benefits of over $700 billion per year just from better goods movement is astounding—it’s hard to find a larger return on investment in infrastructure. And with its reconstruction and modernization estimated at a one-time investment of $1 trillion by the Transportation Research Board’s special committee on the Interstate system’s future, that huge need is easier to justify as a means of preserving and increasing the Interstate system’s benefits going forward.

Spurious Objections to Maryland’s Express Toll Lanes
By Baruch Feigenbaum

Earlier this month, acting Federal Highway Administration (FHWA) Administrator Stephanie Pollack delayed issuing a record of decision on the final environmental impact statement (FEIS) for the Maryland Department of Transportation’s I-270/I-495 express toll lanes public-private partnership project. FHWA was expected to approve the FEIS on Aug. 5. In fact, as of this writing, the agency’s permitting dashboard still lists Aug. 5 as the target date. The project cannot move forward until this document is approved. The agency refuses to set a new date, announcing the review is “in progress.”

The Washington Post reported Maryland Gov. Larry Hogan “blasted federal transportation officials for delaying a decision that would have cleared the way for him to move forward with a plan to build toll lanes on Interstate 270 and part of the Capital Beltway, according to a letter he sent to the Biden administration.”

The Post added Hogan was “completely blindsided” and “chided the acting administrator of the Federal Highway Administration for failing to approve the state’s environmental plan.”

The project has been controversial from the start, especially amongst a large number of NIMBYs (not-in-my-backyard) who oppose most construction proposals in Montgomery County. For example, recently, neighbors in the Homewood neighborhood of Silver Spring were unable to build a sidewalk funded by the neighborhood association because a resident sued to stop its construction because it required tearing out a weed that the homeowner called his “emotional-support plant.” 

The current FHWA has seemed to be hostile toward highway projects that add lanes. It blocked the planned reconstruction of I-45 in Houston, for example. The I-45 project is also understandably controversial because TxDOT’s plan requires taking 1,000 homes. But, in contrast, Maryland’s I-270/I-495 managed lanes project does not condemn a single residential property. In another difference between the Texas and Maryland projects, while TxDOT is hamstrung by an inability to toll or use a P3, requiring its project to have a larger footprint and cost more, MDOT is not adding any general-purpose lanes and is proceeding in a staged approach to minimize the environmental footprint.

One of the groups leading calls for the delay is the Maryland Transit Opportunities Coalition, led by anti-highway, toll-lane critic Ben Ross, who claims to have uncovered fraud because the projected traffic volumes changed between the supplemental draft environmental impact statement (SDEIS) and the FEIS.

Ross’ criticisms center around four points. First, he is concerned that modeled traffic volumes on I-495 between I-270 and I-95 decreased since the SDEIS and argues that this is inconsistent with modeling. Yet the earlier model failed to take into account the number of vehicles that would use the new express toll lanes on I-270 taking that highway to the intercounty connector to reach I-95 north, foregoing the northern part of I-495 altogether. As a result, we would expect traffic volumes to decline somewhat on that portion of I-495. And that’s what the model shows.

Second, Ross questions why traffic on the eastern Beltway (I-95/I-495) between the Potomac River and I-95 would decrease if the managed lanes are built. Again, I believe the previous model did not consider that some traffic currently using the eastern Beltway will switch to the western Beltway (which is now congested at least six hours per day) when the managed lanes provide a congestion-free option between the Dulles Toll Road and the I-270 spur. If enough traffic shifts from the eastern Beltway, travel times would improve on that highway.

Third, Ross is convinced that hourly changes in traffic of 1% to 5% show some type of fraud. Yet, most of the traffic changes result from modeling improvements around the Greenbelt metro station, both in transit station access and local street construction. 

Finally, Ross raises concerns about traffic changes on several arterials. Let’s use MD 201—Kenilworth Ave.—as an example. He argues that if the model places fewer drivers on 201 north of the Beltway, other drivers will switch to 201. While that thinking makes sense from a regionwide perspective, it will not apply to every corridor. And Ross is cherry-picking the corridors to make his point. Perhaps 201 is only a better option for the current drivers. Maybe the long-term plan includes a road diet that will reduce the number of lanes on 201, making it less appealing for drivers. Maybe there are changes to the local street grid that Ross is not capturing.

One major factor that Ross never mentions regarding long-term traffic projections is post-COVID-19 commuting patterns. Workers have been slower to return to the office than some might have expected, reducing peak period car trips. The new modeling takes that into account.

During both EIS processes, MDOT had to use the Metropolitan Washington Council of Governments (MWCOG) traffic-demand model and have the results verified by staff as well as MDOT and FHWA career employees.

The project would help bring faster travel times for Maryland residents who are tired of sitting in traffic congestion on I-270 and I-495. Let’s hope FHWA won’t allow itself to be used as a political tool for NIMBYists.

As Gov. Hogan put it in a letter to President Joe Biden and Transportation Secretary Pete Buttigieg, “This has been called the most important and transformative transportation project for the National Capital Region in the last 50 years, and with so many Marylanders still stuck in soul-crushing traffic, we are not going to let politics delay it any further.”

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Texas Returns to HOV Lanes

In what seems like a return to the bad old days of unmanaged traffic, the Texas Department of Transportation (TxDOT) is planning to spend billions of scarce fuel-tax dollars adding carpool (HOV) lanes to congested freeways. And it’s disguising this effort by referring to them as (non-tolled) “managed lanes.”

I kid you not. For example, these non-managed HOV lanes are in TxDOT’s near-term plans for the eastern portion of the I-635 LBJ Freeway in Dallas (a $1.7 billion project), elevated HOV lanes on I-35 in San Antonio ($1.5 billion), and the I-35 Capital Express Central project in Austin ($4.9 billion). That means Texas is poised to spend over $8 billion on carpool lanes—a flawed and ineffective approach to traffic management.

I’m sure TxDOT fully appreciates the success of the existing express toll lanes in Dallas and Ft. Worth, which are serving numerous satisfied customers every day with faster and more reliable trips than they could get in general purpose lanes or HOV lanes. Alas, the powers that be in populist Texas these days have forbidden TxDOT to spend any money on new toll projects, which means priced managed lanes are forbidden for the foreseeable future.

Texas legislators should also know that HOV lanes have been a failure nationwide. My colleague Baruch Feigenbaum made this case in a new Reason policy brief released last month, “From Failure to Success: Converting High Occupancy Vehicle Lanes to High Occupancy Toll Lanes/Express Toll Lanes.”

HOV lanes were a 1970s idea aimed at saving fuel by reducing the number of people commuting alone. They began as bus-only lanes. That concept left the vast majority of an expensive new lane unused, so carpools were then allowed in—initially four or more people per car, which was soon reduced to three people per vehicle, and in most places down to two (many of which were actually fam-pools—which took no vehicles off the roads). As Baruch’s paper points out, empirical research found that most HOV lanes were either too full during peak periods (i.e., congested) or under-used (wasting expensive pavement). Not only that, during the 1980s and 1990s when most HOV lanes were built, carpooling shrank from 19.7% of commuters in 1980 to just 12.2% in 2000 and down to 9.7% in 2010.

As a result of this large-scale failure, building new HOV lanes pretty much ground to a halt after 2000. Increasing numbers of them have been and are being converted to high-occupancy toll (HOT) lanes—lanes with variable pricing to manage congestion but which let carpools of (usually) three or more people use them either at no charge or at a discounted toll. This has occurred with HOV lanes in Atlanta, Denver, Houston, Los Angeles, Miami, Minneapolis, North Carolina, San Francisco, Seattle, and the northern Virginia suburbs of Washington, D.C., among others. And some newly-built express toll lanes offer free passage only to super-HOVs (vanpools and buses). Such projects exist in Austin, Denver, Orlando, and on I-95 in Maryland.

These projects have been welcomed in blue states (California, Washington State), purple states (Minnesota, North Carolina, Virginia), and red states (Florida, Georgia—and 10 years ago, Texas). Variably-priced HOT/express lanes have a history of bipartisan support in Virginia, which is one of the pioneers of both HOT lanes and investor-financed HOT lanes, predating Texas’s former embrace of both.

With the levels of current and projected traffic congestion in Austin, Dallas/Ft. Worth and San Antonio, investor-financed HOT/express toll projects would likely be quite feasible, avoiding much of the $8 billion drain on TxDOT’s capital budget due to the ban on new tolls. When those new HOV lanes fail—either with too much or too little traffic—it will be too late to recoup their capital costs from new toll revenue, while $8 billion worth of other highway projects across Texas will have been postponed or cancelled due to the diversion of that $8 billion to build 1970s-style HOV lanes.

Note: In 2020 I presented a paper commissioned by the OECD’s International Transport Forum on the impact of HOV and HOT lanes on congestion in the United States. It is downloadable from the ITF website.

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FRA Re-Proposes Flawed Train Crew-Size Mandate
By Marc Scribner

On July 28, the Federal Railroad Administration (FRA) proposed a regulation that would require freight trains to have at least two crewmembers on board during operation, except for case-by-case approval of reduced-crew operations. If this sounds familiar, that’s because this requirement was proposed in 2016 and then withdrawn in 2019 due to a lack of evidence supporting the claim that multi-person freight train crews are safer than single-person crews. FRA has now revived the proposal while furnishing no new safety evidence.

It is, however, the fulfillment of President Joe Biden’s campaign promise to railway labor unions. Contrary to FRA’s statutory mandate, promulgating this crew-size rule will not meaningfully promote rail safety. It amounts to economic regulation masquerading as safety regulation. Worse yet, this rule would perversely harm the interests of railroad workers in the long run by making freight rail less competitive with increasingly automated trucks.

In 2016, when FRA first proposed such a minimum crew-size regulation, it conceded that “FRA cannot provide reliable or conclusive statistical data to suggest whether one-person crew operations are generally safer or less safe than multiple-person crew operations.”

This admission of FRA’s lack of data to support its proposed rule did not originate from FRA. Rather, it came from the White House Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA), which is the executive branch’s regulatory watchdog. The draft notice of proposed rulemaking that FRA originally sent to OIRA for review instead claimed, “Studies show that one-person train operations pose increased risks by potentially overloading the sole crew member with tasks.”

Despite the absence of evidence, FRA continued forward on the proposed crew-size rule until it was withdrawn in 2019. In its withdrawal notice, the agency concluded, “FRA’s statement in the [proposed rule] that it ‘cannot provide reliable or conclusive statistical data to suggest whether one-person crew operations are generally safer or less safe than multiple-person crew operations’ still holds true today.”

The 2019 withdrawal notice also contained a nationwide preemption order that was aimed at overriding several state crew-size laws, which had been enacted in recent years at the behest of railway labor unions. This was challenged in federal court by two railroad unions and three states. In Feb. 2021, the Ninth Circuit Court of Appeals ruled in favor of the challengers, finding that FRA failed to meet procedural requirements in issuing the preemption order. The court remanded the matter to FRA to reconsider the underlying issues. The timing of this decision was especially fortuitous for rail unions because FRA was now controlled by their political allies following President Biden’s inauguration a month earlier.

While on the campaign trail in June 2020, then-candidate Biden raised industry eyebrows when he explicitly promised in a special video for rail union executives that, if elected, he would be “requiring two-person crews on freight trains…to get [unions] the thanks, respect, and opportunities that [they] so richly deserve.”

FRA’s July 28 notice of proposed rulemaking (NPRM) makes good on that promise. Like the 2016 NPRM, FRA concedes 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. Its NPRM also appeals to the same two-decade-old anecdotes from Quebec and North Dakota that fail to provide a reasonable basis for the rule. Indeed, in the case of the 2013 Casselton, ND, accident, FRA’s own recounting of the incident in the new NPRM—”the conductor admitted that he had never been in a situation where a collision was imminent, did not know what to do, and therefore might not have gotten down on the floor and braced himself, as the locomotive engineer instructed”—works against the supposed safety basis of this proposed rule because one-person crew operations would have eliminated the on-board conductor who was put in harm’s way in Casselton due to his own inexperience with proper safety protocols.

While the process for obtaining permission to operate single-person freight train crews is designed to appear more flexible on paper than the 2016 proposal’s waiver process, approval is ultimately at the discretion of FRA political appointees. In an article for Railway Age (“Biden Promise Fueled FRA NPRM,” Aug. 2), longtime rail policy insider Frank N. Wilner explains why the proposed waiver process provides only the illusion of potential regulatory relief. “The FRA’s standards in the waiver process for Class I railroads are arguably designed to assure denial,” writes Wilner. “The FRA, already with its thumb on the scale, sets itself up as the judge over what are unspecified criteria for evaluation. An example is the definition of ‘catastrophic.’ It appears to encompass every event requiring an incident report, including derailments having nothing to do with crew activity.”

The re-proposed crew-size mandate cannot be justified on safety grounds, as required under the law. If finalized, rail carriers are sure to challenge this rule as arbitrary and capricious under the Administrative Procedure Act and exceeding FRA’s statutory authority from Congress. Rail unions undoubtedly view this as a major policy win for their narrow economic interests, but the rule is likely to be self-defeating for their members in the long run.

As discussed in a Sept. 2021 policy brief for Reason Foundation, the trucking industry is anticipated to automate in the coming years, which could reduce truck operating costs by roughly half. A two-person crew-size mandate would impose a perpetual rail labor cost floor, thereby disadvantaging freight rail to its increasingly automated trucking competitors. This would cause shippers to increasingly substitute trucks for rail, which would have economic, safety, and environmental consequences.

With respect to the environment, trucks emit far more pollutants. According to the Environmental Protection Agency (“2021 SmartWay Online Shipper Tool: Technical Documentation,” Table 12), when compared to freight rail, trucks produce approximately 10 times as much carbon dioxide, more than three times as much fine particulate matter, and two-and-a-half times as much nitrogen oxides per ton-mile. Despite its frequently professed commitments to reducing transportation’s environmental footprint, it appears the Department of Transportation under President Biden has made a choice to increase the emissions intensity of the transportation sector in order to reward a favored special interest.

As is always the case in politics, actions speak louder than words. Fortunately, Congress can rein in FRA’s abuse of power. Amending FRA’s statutory authority to prohibit crew-size regulation, defunding enforcement of this rule, and rigorous investigations and oversight should all be on the table.

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Autonomous Trucks Making Progress—But Aren’t There Yet

Last month, Kansas became the 38th state to enact a law that allows the deployment of fully autonomous vehicles on state highways (but it applies to vehicles up to 34,000 pounds, thereby excluding Class 8 big rigs that are the mainstay of long-distance trucking). The 38 state laws range from allowing full deployment and operation for all types of trucks to those that allow only testing with safety drivers.

While there are no Class 8s in regular operation on major highways with no one on board yet, regular operations of such rigs with safety drivers are taking place, with major carriers teaming with autonomy providers such as these:

• J.B. Hunt Trucking with Waymo automation
• U.S. Express with Embark automation
• DHL Supply Chain with Volvo Autonomy
• FedEx with Aurora automation
• UPS with TuSimple automation.

Hardly any truck automation developers plan to build autonomous trucks. Instead, they are partnering with the major original equipment makers (OEMs) such as Navistar (partnering with TuSimple automation), Daimler (with Torc automation), and both Paccar (maker of Kenworth and Peterbilt) and Volvo Trucks (with Aurora automation).

Also interesting is the emerging business model for long-haul automated trucking. FleetOwner reported in Jan. 2022 that both Aurora and Torc are moving toward a model in which a trucking company buys the Class 8 truck with automation as an option. If they buy it that way, the automation company will manage the autonomous portion of its operations, mostly on major highways such as Interstates. Aurora’s CFO Richard Tame explained their business model, which depends on avoiding the cost of a human driver in the truck. As he told FleetOwner, “We don’t have a commercial product with a driver because the sensors [lidar, radar, and camera] are so expensive. Having an expensive kitted-out truck with a safety driver is not a product.”

The trucking company would pay a per-mile fee for Aurora to operate the truck, which he estimated would be about half the cost of drivers. Hence, a win-win for both the trucking company and the automation company.

Yet despite the continued progress with on-road testing for commercial carriers, glitches still occur. The Wall Street Journal reported on Aug. 2 that a TuSimple big rig with a safety driver and engineer on board made a sudden left turn, cutting across I-10 and crashing into a concrete barrier. The article reported that TuSimple’s internal report blamed the accident on one of the onboard employees failing to reboot the automation system before turning the system on, leaving in place an outdated left-turn command. That this kind of error could occur in one of truck automation’s leading companies suggests that we are not yet ready for fully autonomous commercial service.

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Are Highway Workers “Pedestrians”?

Everyone is rightly concerned about recent increases in pedestrian deaths on and alongside roadways. But is that total being exaggerated by a data problem? The American Road & Transportation Builders Association (ARTBA) has been pointing this issue out for years, without the problem being addressed. (“Counting Vulnerable Road Users,” Brad Sant, Transportation Builder, May-June 2022)

The National Highway Transportation Safety Administration (NHTSA) is the source of data on pedestrian fatalities, and the data it reports include deaths of highway workers in work zones—but these deaths are not reported as a subtotal. The only other potential source is the Bureau of Labor Statistics (BLS), which seeks to report all on-the-job worker deaths. But according to ARTBA, isolating highway work zone deaths in BLS data is difficult since the BLS categories are by type of work performed, not by location.

The new IIJA legislation calls for state and federal agencies to deal with safety hazards for “vulnerable road users” (VRUs), whose definition in the law includes highway workers. The article reports that the VRU materials prepared for stakeholder meetings on VRUs earlier this year did not address the data problem noted above but noted that ARTBA participants reminded agency officials that highway worker deaths should not be hidden within the “pedestrian” category.

Effective measures to reduce fatalities of individuals on highways depend on accurate data on who, where, and why these fatalities occur. As Marc Scribner pointed out in the June issue of this newsletter, the new Safe Road and Streets for All grant program addresses fatalities that occur on only 47% of America’s roadway route miles—primarily county and municipal mileage. Despite being touted as the answer to rising “pedestrian” deaths, it is focused on less than half the problem. And since many highway work zones occur on state DOT miles, they are not even eligible for the one federal program aimed at reducing “pedestrian” fatalities.

In short, we have no idea what fraction of the record-high 2021 “pedestrian” fatalities were actually deaths of workers in highway work zones. Without that information, it is hard to figure out where it makes sense to allocate resources effectively to reduce that horrible toll.

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News Notes

Pennsylvania Legislature Bans Toll P3s
Following citizen lawsuits opposing PennDOT’s $2 billion plan to toll-finance the replacement of nine major Interstate highway bridges, the legislature enacted a sweeping revision of the state’s public-private partnership (P3) law for highways. It bans projects that would toll all lanes of a highway or bridge but allows tolls that are optional (as on newly built express toll lanes). Even that would require the permission of the legislature. While PennDOT hopes to proceed with replacing the nine aging bridges, it’s facing a major problem: where to find an additional $2 billion.

First Express Toll Lanes Project Proposed for New York State
On Aug. 4, Assemblywoman Michaelle Solages and the Long Island Contractors Association released a report proposing a P3 procurement of what would be the state’s first express toll lanes. The project would add an ETL each way along the 25.5-mile Southern State Parkway. The report refers to hazardous conditions on the parkway, including sharp curves, short on-ramps and off-ramps, too many small exits, and intersections with three major north-south highways. When it opened in 1927, the speed limit was 35 miles per hour and traffic volume was a small fraction of today’s level. New York state does not have a transportation P3 law, though the Port Authority of New York & New Jersey has done a number of large-scale P3 procurements.

San Diego Competition Has Three Finalists
SANDAG, the metropolitan planning organization for San Diego County, has selected three finalists in its competition for innovative public-private partnerships in transportation. One, from Beep and Balfour Beatty, would create mobility hubs served by autonomous electric shuttles. Cordoba Corporation (with a large team of others) proposed extending a current light rail line across the border into Tijuana. And Cavnue (also with a number of partners) proposed “a next-generation managed lanes network” aimed at express buses and autonomous vehicles. These finalists will each get a $50,000 stipend to flesh out what they have proposed.

Another Express Toll Lane Proposed for I-77 in Charlotte
The North Carolina DOT recently received an unsolicited proposal to finance, develop, and operate express toll lanes on I-77 South, between Charlotte and the South Carolina border. It did not release the identity of the company or team that submitted the proposal. Toll projects in the state must be requested and approved by the local transportation planning organization before NCDOT can ask for competitive proposals. Last month, the Charlotte Regional Transportation Planning Office voted to study the I-77 corridor and asked NCDOT to share whatever information it has about the proposal to assist CRTPO in its assessment.

Major Bottleneck Fix Under Way in Columbia, South Carolina
In a project estimated to take eight years and $2.08 billion, SCDOT is under way on redesigning and rebuilding “malfunction junction,” where I-26, I-126, and I-20 all come together in the Columbia metro area. It is SCDOT’s largest construction project ever. This overloaded interchange is the bane of daily commuters, vacationers, and long-distance truckers. It is ranked at #61 on the American Trucking Associations’ 2022 ranking of the country’s top 100 truck bottlenecks. Were this project to be financed up-front based on projected toll revenues (rather than being built out of annual SCDOT cash flow), it would likely be finished and in service several years sooner—and would come with guaranteed ongoing maintenance.

First Kansas Express Toll Lane Project Starts Construction This Fall
Kansas DOT and its contractors will break ground in mid-September on the state’s first express toll lanes project. It will add an ETL each way on U.S. 69 in the vicinity of Overland Park. The project is being pursued on a design-build basis. In addition to adding the express lanes, it will also add 11 noise walls along portions of the highway.

New Providers of EV Charging Emerge
Last month, General Motors and truck-stop company Pilot Co. announced plans to build a network of electric vehicle charging stations nationwide. The aim is to add 2,000 fast-charging stalls at 500 Pilot and Flying J locations, with most to be completed by 2025. They will be open to all electric vehicles, but drivers of GM vehicles will be able to make reservations and get discounts. Separately, Tesla announced that it plans to open “some” of its current Supercharger network to non-Tesla EVs.

Majority Stake in Canadian Parkway P3
A majority stake in the (non-tolled) Herb Gray Parkway in the Windsor, Canada area, is on the market. The developers/operators of this P3 expressway (ACS, Fluor, and Acciona) are selling the majority of their shares in the 30-year concession, which was financed based on availability payments from the Ontario government. The project began with a C$1.2 billion design/build/finance/maintain concession, and the Parkway opened to traffic in 2015. According to Inframation News, the buyer is Connor, Clark & Lunn Infrastructure (CCL).

NHTSA Approves Autonomous Electric Truck
Einride, a freight technology company, has received approval from the National Highway Traffic Safety Administration to operate its Autonomous Electric Transport vehicle on public roads. Einride plans to operate it for commercial customers, including GE Appliances. There will be no driver in the vehicle, but each will be monitored in real time by a remote pod operator. 

Transit Ridership Not Expected to Return to Pre-Pandemic Levels This Decade
That’s the title of a report by Phil Plotch of the Eno Center for Transportation, released on July 1. Plotch cites sobering statements from some of the country’s largest transportation agencies, including the Port Authority of New York & New Jersey, Chicago Metropolitan Agency for Planning, Los Angeles Metro, San Francisco BART, and the New York MTA. What appears to be a permanent change in working from home is a major factor in current ridership and in the restrained forecasts for the rest of this decade.

Oklahoma DOT OKs Three New Turnpike Routes
All three projects are aimed at improving connectivity with existing turnpikes. The Tri-City Connector will connect the Kilpatrick Turnpike near the airport with I-44. The planned East-West Connector will link I-44 through I-35 to connect with I-40. And the new South Extension Turnpike will link the East-West Connector to I-35.

U.K. Demonstration Project Claims Platooning Is Safe
The multi-year HelmUK trial of platooning on highways involved heavy trucks, electronically linked to take advantage of less air drag when driving closely behind one another. It was supported by the Transport Research Laboratory, National Highways, and the Department for Transport. The official finding is that platooning can be safely carried out on the U.K. road network but that improvements to fuel economy and air quality were “not as significant as predicted.”

Feds May Sell Their Share of SH 130 Concession
Back in 2016, U.S. DOT’s Build America Bureau converted its $430 TIFIA loan into an equity stake in the company (SVP) that acquired the toll highway out of bankruptcy. In late June, BAB announced that it is exploring the possible sale of its 34% equity stake. Neither the SH 130 Concession Company nor its majority owner, SVP Global, made any comments to the Inframation News reporters.

Correction re New York Ferry News Note
An alert reader spotted an error in last month’s News Note about the money-losing NYC Ferry system. The Independent Institute study noted that the per-ride subsidy on those ferries is over $9, compared with only $1 per rider subsidy for the subway. The news note garbled that, incorrectly stating that the ferry fare is only $1. Actually, the ferry fare is the same as the subway fare.

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Quotable Quotes

“It’s worth thinking a little about induced demand. Here’s what it gets right. Suppose that the Highway Fairy comes along and builds a second deck on top of I-95 from Richmond, Virginia all the way up to Portland, Maine. Traffic becomes a lot less congested, and because traffic is less congested, car trips around the Northeast go faster. Because driving is now faster, it poaches mode share away from Amtrak and airplanes on the Northeast Corridor. And ideas like ‘let’s drive from Fredericksburg up to Baltimore to see the Aquarium’ or ‘let’s drive from Providence to Portland for the long weekend,’ or ‘I can commute to Philadelphia from south of Wilmington’ start to seem more appealing. All that extra driving eventually soaks up the additional highway capacity, and the bigger I-95 ends up congested after all. I think that’s an accurate description of the situation, but it’s fundamentally odd to describe that as if the Highway Fairy didn’t accomplish anything useful here. People got to go more places and do more stuff. To the extent that there’s a genuine problem with overbuilding roads, it’s that sometimes they don’t induce much demand. That’s a ‘bridge to nowhere’ and a waste of resources.”
—Matthew Yglesias, “Answering Bill Maher’s Concerns on Traffic and One Billion Americans,” Slow Boring, Substack.com, Aug. 3, 2022

“The tragedy of transport planning in the U.S. is that there continues to be a belief that the reason there is low transit ridership is the car industry, which in a conspiracy with politicians and land speculators, has made mass transit unsuitable for moving people from where they are to where they want to go. With the exception of NYC and to a certain extent Boston and Washington, DC, American cities have been built when they were necessary, but with the objective of housing their residents in the type of dwelling they preferred, that is, a house on a piece of land that are both as large as the owner can afford. This has resulted in low densities and, therefore, lower than optimal numbers to support public transit.”
—Michael L. Sena, “Mobility Implications of America’s Anti-City Legacy,” The Dispatcher, Aug. 2022

“Buttigieg concluded that he believed tolling would be limited to specific locations and high-traffic highways and bridges, rather than an approach for how the road system at large would be funded. In response Rep. Daniel Webster (R, FL). who raised the tolling question, did not offer any evidence of the benefits from expanded toll roads in Florida’s Orlando metropolitan area in terms of delivering new infrastructure that enables economic growth and expanded access to economic opportunity. . . . There is no one silver bullet to address the systemic and structural shortfalls of federal transportation revenue. A variety of solutions is needed to contribute to a comprehensive and viable toolbox of solutions—including tolling, road-use charging, congestion pricing, and other mechanisms that allow users to pay for the facilities and services they consume. But continuing to avoid the tough decisions on how to pay for transportation infrastructure does a disservice to the American people.”
—Mark Muriello, “Missed Opportunity for Highway Revenues in House Committee Meeting,” IBTTA Tolling Points, July 21, 2022

“This [automation] doesn’t, especially in the short term, replace human drivers. It just kind of eats into the shortage. . . . So what might happen is that the very long routes—that force drivers to be away from home all the time—get taken over by something like this. Then those people can start going to more regional driving and can get home every night. So it’s not really a replacement story. It’s sort of an implementation story.”
—Richard Tame, quoted in “As Excitement of Self-Driving Trucks Grows, Fleets Will Soon Have Products to Choose From,” FleetOwner, Jan. 18, 2022

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The post Surface Transportation News: Quantifying the value of Interstates, Texas HOV lanes, and more appeared first on Reason Foundation.

• Urban freeway teardowns begin
• State DOTs accelerate highway capacity expansion
• Equity concerns pose problem for express toll lanes
• A physicist’s warning about hyperloop
• Federal EV charging plans fall short
• Ocean shipping problems—and non-solutions
• News Notes
• Quotable Quotes

Urban Freeway Teardowns Begin

Two important developments regarding urban expressways took place within the past month or so.

First, on May 31, New York State’s Department of Transportation (NYSDOT) announced that its plan to demolish I-81 through downtown Syracuse and replace it with a boulevard had received approval from U.S. Department of Transportation (DOT). Second, on July 1, DOT’s Federal Highway Administration (FHWA) announced the notice of funding opportunity (NOFO) for its Reconnecting Communities program, which offers both planning grants and (de)construction funds to remove or deck-over urban expressways that divided communities when they were built in the 1960s.

Tearing out urban freeways has long been a goal of the Congress for a New Urbanism (CNU), whose latest list of “freeways without futures” totals 15, including I-81 through Syracuse, I-35 through Austin, and the Brooklyn-Queens Expressway in New York City (I-278).

In my book Rethinking America’s Highways (University of Chicago Press, 2018), I examined CNU’s claimed success stories, and found that their handful of cases were mostly stubs of planned but never-built freeways (Milwaukee and San Francisco), so their claim that after removal the former freeway traffic “just melted away” is hardly applicable to an Interstate that is a key link in a metro area’s overall mobility.

In researching this article, I talked with several transportation experts involved in debates over the Syracuse I-81 project. A former DOT Secretary pointed out that never before has a key link in a major (two-digit) Interstate been proposed for deconstruction—and questioned whether this is even legal. Attorneys working with opponents shared with me letters sent to FHWA and NYSDOT arguing that the Draft Environmental Impact Statement (EIS) failed to properly consider all the impacts and had not examined alternatives to the teardown, as opposed to single-mindedly pursuing the “long-standing predetermined option” of the boulevard (termed a “community grid”).

Also of interest was a submission to FHWA dated March 10, 2022, arguing that the Final EIS and Record of Decision would violate Title VI of the 1964 Civil Rights Act. The letter argued that the replacement of the freeway by the “community grid” would inflict serious harm, in the form of traffic congestion and vehicle emissions, on Syracuse’s South Side community, home to more than 61% of the African-Americans that live in Onondaga County. It also pointed out that the plan is inconsistent with the 1999 Southside Transportation Study, which argued that, “Limiting commuter traffic traveling through the study area would assist in the preservation and enhancement of the pedestrian nature of this area.”

Fortunately, contrary to some deconstruction dreams, there are alternative ways to reconnect communities that were bisected 50 years ago by freeways. Where these corridors are still key links in the overall metro area traffic flow, they can be replaced by tunnels (as in Seattle and Boston) or by depressing the freeway lanes below grade and decking over the surface, as long ago took place for portions of I-5 in Seattle, I-10 in Phoenix, I-35 in Duluth, MN, the Woodall Rogers Freeway in downtown Dallas, and I-70 in St. Louis—and recently completed on a formerly elevated section of I-70 in Denver. Projects now planning to deck over freeways (which would be eligible for grants under the new Reconnecting Communities program) include the Kensington Expressway in Buffalo and the Rose Quarter section of I-5 in Portland.

In the April 2022 issue of this newsletter, I summarized the results of a study assessing the costs and benefits of decking over, rather than demolishing an urban freeway. Analysts Jeffrey Brinkman and Jeffrey Lin of the Federal Reserve Bank of Philadelphia drew on data and economic models to evaluate a hypothetical project to deck over a 4.5-mile stretch of I-95 in Philadelphia (where other portions of I-95 and I-676 have already been decked over). Their estimate of the cost of their proposed I-95 project was $2.25 billion. That happens to be the official NYSDOT estimate for tearing down I-81 and replacing it with the “community grid” boulevard. Putting I-81 below grade and decking it over would be a far better solution for Syracuse.

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State DOTs Accelerate Highway Capacity Expansion

Politico recently reported, somewhat critically, on congressional support for projects that will add highway capacity. “Appropriators on Wednesday appeared to advocate for widening highways where bottlenecks are constraining freight movement—a recommendation that would contradict DOT’s policy of avoiding highway expansion,” opens the article. The nerve of those appropriators!

Despite last fall’s “guidance memo” from the Federal Highway Administration suggesting that in applying for the expanded federal discretionary grant programs in the Infrastructure Investment and Jobs Act (IIJA), state transportation departments would be wise to focus on projects that better maintain existing infrastructure rather than projects that add capacity to highways. Nevertheless, state DOTs and toll agencies are moving forward with major projects to expand capacity.

In fact, there is a good case for adding highway capacity in at least three kinds of situations: adding to capacity in states with fast-growing populations (hoping to at least stay even), replacing obsolete bridges (and adding new lanes to cope with future growth or to eliminate bottlenecks where a bridge has fewer lanes than the highways on either end), and adding lanes in highway corridors where truck traffic is expected to grow by 40% or more by 2040.

Much of the capacity expansion under way or planned falls into one or more of these categories. Here are some examples.

Adding More Capacity to Keep Pace with Fast Population Growth

Texas (#1, at 15.3% population growth 2019-2020) is:

• Extending the Grand Parkway around Houston by 53 miles;
• Widening 9.3 miles of the Dallas North Tollway from three to four lanes each way and adding managed lanes to several congested freeways in Dallas;
• Widening I-35 through congested San Antonio and Austin.

Colorado (#2, with 14.5% population growth)

• Widening 13 miles of I-70 west of Denver to eliminate the notorious bottleneck at Floyd Hill;
• Continuing to add express toll lanes to congested freeways in the Denver metro area.

Florida (#3 at 14.2% population growth)

• The Central Florida Expressway Authority will invest $4 billion over the next five years to add capacity to and improve its tollway network in the Orlando metro area.
• Florida’s Turnpike is widening its southern link in Miami-Dade County from four to eight lanes each way.
• The Turnpike mainline is being widened in Palm Beach County and west of the Orlando metro area.

Arizona (#6 at 13.9% population growth)

• The state DOT has approved $6.7 billion for roadways over the next five years.
• Projects include a $990 million widening of the remaining portion of I-10 in Phoenix with only two lanes each way (a major bottleneck);
• Another project will widen a stretch of I-17 north of Phoenix.

South Carolina (#8 at 11.3% growth)

SCDOT has embarked on a program to widen much of its Interstate system, including:

• I-85 in Greenville and Spartanburg Counties ($1.26 billion);
• I-26 between Columbia and Charleston ($1.7 billion);
• And, completing the I-526 loop ($2.3 billion).

Replacing Obsolete Bridges

• Alabama DOT is gearing up for its $2.7 billion plan to upgrade its Bayway and add a new, higher bridge across the Mobile River, partially financed by tolls.
• Kentucky and Ohio are nearing agreement on a plan to replace the obsolete Brent Spence Bridge across the Ohio River, at an estimated cost of $2.8 billion.
• Kentucky and Indiana have begun construction of the $1.2 billion I-69 bridge across the Ohio River.
• Louisiana DOT is moving forward with two major bridge replacements: the $850 million I-10 Calcasieu River Bridge and the $2.5 billion I-10 Baton Rouge Bridge.
• Oregon and Washington are nearing agreement on the replacement bridge on I-5 across the Columbia River, at a cost that may reach $5 billion.

These bridges will each add lanes compared with the existing crossings, to remove a current bottleneck and account for likely traffic growth over 50+ years.

Adding Truck Lanes to Key Truck Corridors

A 2013 Reason Foundation policy study analyzed FHWA Freight Analysis Framework projections of truck traffic on major Interstate routes. It identified 11 multi-state corridors that were forecast to reach or exceed 40% of all VMT as trucks by 2040. They include east-west routes:

• I-10 from California to Mississippi
• I-30 in Arkansas and Texas
• I-40 from California to Tennessee
• I-70 from Missouri to Pennsylvania
• I-76 in Colorado
• I-80 from Nebraska to Ohio
• I-84 in Idaho.

North-south corridors needing dedicated truck lanes are:

• I-65 in Tennessee, Kentucky, and Indiana
• I-69 in Indiana
• I-71 in Kentucky
• I-81 from Tennessee to Pennsylvania

Given the explosion in truck traffic due in part to the growth of online shopping, those projections of needed truck-only lanes are likely conservative at this juncture.

The bottom line is that there is an enormous, well-justified need to expand the capacity of selected highways and bridges—not everywhere, but in high-growth states, where obsolete bridges also fail to provide enough capacity, and where truck traffic is projected to grow to unprecedented levels. State DOTs and toll agencies that are pursuing such projects should be thanked, not criticized.

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Equity Concerns Present Challenges for Express Toll Lanes
By Baruch Feigenbaum

Equity is becoming a core concern for many state transportation departments. And express toll lanes, which are perceived by some politicians as being too expensive for users, are at the tip of the spear. Many DOTs have started workgroups or contracted with consulting companies to research ways to improve express toll lane equity.

Some of the studies are politically directed. For example, in 2019, the Washington state legislature ordered the Washington State Transportation Commission to examine how a low-income toll program could operate for the express toll lanes on SR 167 and I-405 in the Seattle metro area. Together with WSP, the commission conducted a study that looked at five types of discounts: percentage discount, fixed discount, fixed toll credit, fixed number of free toll trips, and/or a lower maximum toll. The study scored the programs based on user benefit, program cost, operational benefit, and feasibility. The two that scored best were a fixed number of free trips and a fixed amount of toll credits.

Some equity projects are more of a spur-of-the-moment reaction to public concerns. Elizabeth River Tunnels, which operates the downtown and midtown tunnels in the Hampton Roads, Virginia region, was under intense pressure from then-Gov. Terry McAuliffe to offer relief from high tolls and late fees. Today, the Abertis-operated tunnels allow drivers with an EZ-Pass who make eight or more trips per year and earn less than $30,000 per year to use the tunnel for $0.75 per trip, about 1/3 the price for other EZ-pass users.

Another option is for agencies to offer a discount for the first month of service for new customers. In Los Angeles, for example, the Los Angeles County Metropolitan Transportation Authority is offering a one-time toll credit of $25 to low-income households who set up their FasTrak account. In Southern California, vehicles with three or more people already travel toll-free on the I-10 and I-110 express toll lanes. Yet, the agency is offering a toll credit to residents who make up to $27,180 for a single person to $93,260 for a household with eight members.

Other regions are proposing different programs. In 2017, Minnesota approved a program providing annual toll credits for express toll lanes, which has yet to be implemented. Toll agencies in the San Francisco Bay Area have proposed a percentage discount on every toll that low-income drivers pay. And Colorado is examining how it might implement low-income discounts on express toll lanes (ETL) on I-25 and I-70.

Providing discounts for those paying for highways is a relatively new development. No government provides discounts for fuel taxes paid, and there are not typically discounts for tolls paid on traditional turnpikes.

There has not been a major outcry from current low-income ETL customers for discount programs. An earlier University of Washington study found that the lowest-income quintile using the I-405 ETLs benefitted the most from variably-priced toll lanes. That’s because lower-income motorists use these optional lanes when the time they save is deemed to be worth more than the cost of the toll, such as when they are running late for work or when they need to pick a child up from daycare before late fees kick in.

While recent attempts to address equity are sincere, they are also inherently problematic for the management and operation of express toll lanes. The most serious problem with discounts and free trips is that they undercut the ability of variable tolls to reduce traffic congestion. Drivers that receive discounts are not likely to be as sensitive to the price in the lane as other drivers. With fewer vehicles responsive to changes in toll rates, the lanes may lose their effectiveness in providing uncongested travel options for drivers—the entire purpose of express toll lanes. And that harms regular customers as well as express bus services that use the ETLs. Artificial toll caps have created similar problems on express toll lanes on I-95 in South Florida and I-405 in Seattle. Other express toll lanes are mandated to provide free or discounted passage to electric vehicles or motorcycles, which also reduces pricing’s power. Yet, the Washington report does not acknowledge or attempt to remedy how discounted tolls limit pricing’s effectiveness.

A second problem with offering toll discounts is that it reduces the toll revenue. For public agencies, this may make the difference between being able or unable to build, maintain, and operate the toll lanes. And when money gets tight, maintenance often gets cut. For private concessionaires, these programs can make a viable project not viable, resulting in delays or cancellation of the construction of new express toll lanes.

Third, discounts disincentivize commuters from using transit. With some ETL projects, toll rates help pay for express bus service. Reducing the toll rates makes driving cheaper and makes providing transit more challenging. It incentivizes single-occupant commuting and traffic congestion, exactly opposite of what most metro areas are trying to achieve.

Highway providers should operate like utilities but they seem to be under more pressure than other utilities to offer special discounts. A better solution is to provide transportation vouchers to low-income households. If those households want to use express toll lanes, then they could use the vouchers to help cover the costs. But they should also be able to use the vouchers on other transportation options, such as buses and express buses operating in the express toll lanes. In addition to reducing costs to low-income commuters, vouchers allow tolled roads to operate more like utilities, give the commuter power over his/her commute options, and better address the transportation equity challenges.

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A Physicist’s Warning About Hyperloop

On May 26, a website called Bigthink.com published an article called “Elon Musk’s Hyperloop Is Possible. How Badly Do We Want It?” The piece raised some concerns I’d written about and others that were new to me. The author, Tom Hartsfield, was also new to me. The Bigthink website identified him as a physicist living in Los Alamos, NM. His articles on the site cover a wide array of technology topics, and the two that I read (on subjects I’ve seriously researched) looked sound. So I’m summarizing the main concerns in his article.

He first explains that hyperloop is a proposed system that would propel passenger modules through long-distance tubes evacuated of nearly all air, to permit speeds potentially in excess of 700 miles per hour due to almost no air drag. Hartsfield then turns to the physics problems. His main concerns are with the near-vacuum tube. First, as I have written previously in this newsletter, he explains the need for airlocks at hyperloop stations, to separate the near-vacuum in the tube from the atmospheric pressure in the station and its boarding platform. That’s the easy problem to solve, but never seems to get mentioned (or costed-out) in the glossy studies urging near-term construction of passenger-carrying hyperloop systems.

Maintaining the near-vacuum in those very long tubes is a bigger challenge than most hyperloop boosters have acknowledged. To ensure there are no leaks, he recommends that the hundreds or thousands of miles of tubes be constructed of steel, which is much stronger than glass, plastic, or aluminum. (Note: the difference in air pressure between an airliner in flight and the atmosphere outside is small compared with the needed atmosphere inside the passenger pods versus the near-vacuum in the tube.) But if the tube segments are welded together, then the entire (thousand-mile?) tube would expand and contract with temperature changes, and its support must allow these expansions and contractions. Alternatively, if numerous tube sections are joined together by some means other than welding, then every one of these joints is a potential source of failure.

Potential disasters are Hartsfield’s main concern. If any of the hyperloop developers have carried out what we in aircraft engineering (my first job out of MIT) called a “failure modes and effects analysis,” they’ve kept the results to themselves. Hartsfield points out that if a joint fails, air would rush into the vacuum, creating a shock wave that would travel down the tube at the speed of sound. (I cannot verify that speed, but it is plausible.) If the breach occurs behind the train of pods, he claims the shock wave wouild destroy the train and kill its passengers. 

What if, for some reason, the pod-train stops moving, somewhere in vacuum tube? With the pods’ limited on-board air supply, how would passengers escape out of the hermetically sealed tube? This safety/evacuation concern may require that the whole thousand-mile tube be able to be shut down in sections in the event of such a failure, which would bring at least some of the other pod-trains to a halt and likely require their passengers also to evacuate once their tube section was filled with air at atmospheric pressure.

Finally, Hartsfield also points to external damage to the tube. Suppose some kind of vehicle crashes into the tube, or somebody takes a shot with a 50-caliber bullet? Would the tubes be tough enough to survive without a breach that would let in an uncontrollable continuous blast of air? And to protect against this, would there have to be extensive monitoring and security, far more than is required for railroad lines? Or would all the tubes have to be underground, at considerably greater construction cost?

Some of these concerns may be exaggerated, and perhaps some hyperloop developers have proposed solutions. But nothing about safety and security has appeared in any number of supposed hyperloop feasibility studies, which often appear to be written as promotional documents to attract taxpayer funding. Until independent engineering studies—especially concerning failure modes and effects analysis—are carried out and can be peer-reviewed, I will remain skeptical that hyperloop has any real likelihood of becoming a new mode of intercity passenger travel.

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Federal Electric Vehicle Charging Plans Fall Short in Many Cases

Last month, U.S. DOT released its proposed regulations for electric vehicle charging infrastructure, governing the $5 billion (over five years) allocated in formula funds by the 2021 Infrastructure Investment and Jobs Act (IIJA). Among the requirements in the proposed regulation are the following:

• Electric vehicle (EV) charging facilities must have at least four DC fast chargers, each of which must be capable of delivering 150 kilowatts per vehicle while all are in operation.
• Charging stations must provide secure payment methods that accept major credit and debit cards.
• All traffic control devices and highway signage must comply with existing federal regulations.
• Chargers must display the price in dollars per kilowatt-hour.
• Charging ports must have annual “uptime” ratios of 97% or greater.

Those are relatively innocuous regulations, but the concerns being raised by state DOTs deal with two matters that are part of federal law. The 2021 IIJA requires states to provide EV charging stations every 50 miles along major highways. And long-standing federal law prohibits commercial services at the rest areas on Interstate highways (other than the exempted service plazas on tolled Interstates). Both policies are raising concerns at state DOTs in rural and western states.

Jennifer Hiller’s June 14 front-page Wall Street Journal article, “Plan for EV Chargers Meets Skepticism in West,” addressed both concerns. In Montana and other western states, “there are plenty of places where it’s well more than 50 miles between gas stations,” Rob Stapley of the Montana Department of Transportation told Hiller. And even where there is a potential location (e.g., an exit) there might not be any nearby source of enough electricity to supply a charging station that meets federal standards. A Utah DOT official told Hiller that sites with lighting and amenities are often located five-to-10 miles further than the 50-mile requirement.

Hiller’s article also points out that rest areas on Interstate highways do have electricity service, but even if there is enough capacity to provide four DC fast chargers, the rest areas lack food and shopping services that EV customers could use while they wait for their EV to be charged. New Mexico DOT’s Joe De La Rosa argued that the ban on commercial services leaves states with unappealing choices for EV charging: “The reason [rest areas] exist is that there’s nowhere else to stop. This is the middle of nowhere.” This makes a nonsense out of claims from the ban’s supporters that any commercial services at rest areas will take business away from gas stations and convenience stores at Interstate off-ramps. Idaho Gov. Brad Little (Republican) and Colorado Gov. Jared Polis (Democrat) sent a letter to FHWA on behalf of western governors asking for flexibility in locating EV chargers.

The role of the truck-stop and convenience store industry in lobbying to keep the commercial services ban in place continues to attract criticism. Aaron Gordon of Motherboard, on June 13, published “Big Truck-Stop Lobby a Huge Roadblock for Rural Electric-Vehicle Charging.” Like Hiller’s Wall Street Journal story, Gordon focuses on western states. As an example, he cites a 70-mile stretch of I-90 in Wyoming between Gillette and Buffalo, with a rest stop halfway between them at Arvada (population 33). If sufficient electricity could be added to the rest area, it would be the only feasible location for a charging station.

Gordon quotes convenience-store lobbyist Doug Kantor saying, “You can’t really have businesses develop at exits if you have them at rest stops.”

Needless to say, there are few convenience stores in Arvada. Truck-stop lobby group NATSO, the National Association of Truck Stop Operators, argues that if rest areas are allowed to have EV chargers, this will “discourage existing refueling stations . . . from investing in charging infrastructure.”

That is also nonsense, since a typical gas station with six or eight pumps cannot afford to give those spaces to vehicles that would occupy them for 30-to-45 minutes rather than the five minutes it takes to fill up the gas tank and use the restroom.

The federal ban on commercial services at Interstate rest areas is a significant obstacle to electric vehicle charging on Interstate highways in the western states. There are no good reasons for keeping this anachronism in the federal code.

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Ocean Shipping Problems and Non-Solutions
By Marc Scribner

When President Joe Biden signed the Ocean Shipping Reform Act into law on June 16, he promised it would “lower shipping costs.” The law increases the regulatory power of the Federal Maritime Commission and mandates new disclosure requirements, but it will not address the root supply and demand imbalances responsible for snarled supply chains and logistics congestion. While there are no quick and easy solutions to these problems, certain policies could relieve some of the pressure. Unfortunately, politicians are continuing to look in all the wrong places for ideas and risk worsening the problems they claim they are trying to address.

The COVID-19 pandemic disrupted every link of our global supply chains in numerous ways, with labor and capital shortages and misallocations hitting producers, carriers, shippers, distributors, and retailers from the raw materials to finished consumer goods. Price and time uncertainty has grown and tempers have flared. The uncomfortable truth for politicians is there are no quick and painless solutions to these myriad problems. What is needed is patience and systematic thinking to identify and jettison policy impediments to inevitable market adjustments. Unfortunately, and perhaps unsurprisingly, many politicians in both major political parties have instead opted for panic and cheap demagoguery.

These noxious politics were on display in the bipartisan Ocean Shipping Reform Act that became law in June. The original House version of the bipartisan bill (H.R. 4996) was introduced by Reps. John Garamendi (D-CA) and Dusty Johnson (R-SD). Their bill would have worsened our supply chain choke points by limiting carriers’ options to clear bottlenecks. Most bizarrely, it would have authorized price controls on detention and demurrage fees charged to customers who are late to pick up or drop off shipping containers, one of the few pro-velocity tools carriers possess. It was the maritime equivalent of removing congestion pricing because gridlock got worse.

What ultimately was signed into law by President Biden was the Senate’s version (S. 3580), which omitted or watered down the most counterproductive elements of the Garamendi and Johnson bill. But Rep. Garamendi returned with new maritime legislation introduced in late June, the American Port Access Privileges Act (H.R. 8243).

Like Rep. Garamendi’s previous efforts, this bill was seemingly written in support of California’s agricultural exporters without a lot of concern for on-the-ground transportation realities. Among other provisions, it would give preference to carriers who book at least 51% American exports as determined by weight or container volume. A shipping industry source said if adopted in practice, a vessel loaded with 51% typical U.S. agricultural containers would literally capsize due to excess weight.

Rather than proposing legislation that would sink ships in America’s harbors, Rep. Garamendi and his colleagues ought to focus on real problems and work to identify real solutions. Low-hanging fruit would include repealing the Jones Act, which requires that only American-built and -flagged vessels can move domestic goods between two U.S. ports. Its total impact on the economy may be small, but the Jones Act fails to achieve each of its claimed objectives and disproportionately harms Americans living in Alaska, Hawaii, and Puerto Rico.

Another idea would be to focus on ensuring modern technologies and practices are adopted at U.S. ports. This is much more complex and politically difficult and would require relaxing the stranglehold that the longshoremen unions have on America’s ports. On the West Coast, a labor contract dispute threatens to exacerbate congestion at the ports of Los Angeles and Long Beach, which handle nearly half of the U.S.’s containerized imports from Asia. The primary source of friction between port operators and the International Longshore and Warehouse Union is the union’s absolutist opposition to any cargo handling automation at these two adjacent ports.

Peter Tirschwell, vice president of maritime, trade and supply chain at S&P Global Market Intelligence, wrote recently in The Wall Street Journal (“More Supply-Chain Disruptions Are Coming,” June 30) that, “the West Coast ports risk becoming uncompetitive if they don’t automate. Other ports have done so and it’s one of the reasons some of the notable West Coast facilities are at the bottom of global port-productivity rankings.”

In fact, only two U.S. ports—the ports of Virginia (#27) and Miami (#39)—appeared in the top 50 most-productive global ports on the Container Port Performance Index 2021’s statistical rankings, which is jointly produced by the World Bank and S&P Global Market Intelligence. It should not be surprising that the Port of Virginia is America’s most automated port and has avoided the severe congestion problems common at more labor-intensive U.S. ports.

In an ideal world, politicians would reject their worst impulses to “do something,” accept that there are no painless short-term solutions to pandemic-induced market turmoil and work to eliminate legacy barriers to free enterprise to set the stage for more dynamic and resilient global supply chains. But in the real world, it looks increasingly likely that a global recession that tamps down goods demand and tightens labor markets may be the solution. A recession would both ease logistics congestion and distract politicians from making their counterproductive policy responses to it. They probably won’t want to claim credit, though.

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News Notes

IBTTA Response to Tolling Interoperability Article
The International Bridge, Tunnel and Turnpike Association published a critical response to Baruch Feigenbaum’s June article in this newsletter, which discussed the industry’s slow progress in implementing nationwide interoperability of electronic tolling. The commentary by Mark Muriello defended the industry’s current approach of seeking multi-protocol solutions rather than a universal transponder. The piece is posted on the IBTTA website here .

Chicago Skyway Concession May Be Sold
Bloomberg News reported on June 8 that two of the three Canadian pension funds that own the 99-year concession for the Chicago Skyway “are exploring the sale of their lease.” Both OMERS Infrastructure and Canadian Pension Plan Investment Board (CPPIB) are working with advisor Evercore on the potential sales. Together with Ontario Teachers Pension Plan (OTTP), the pension funds acquired the Skyway Concession Company from the joint venture of Cintra and Macquarie in 2015, paying $2.84 billion. Each pension fund owns one-third of the concession. The Bloomberg report cites a consultant’s estimate that the Skyway is now worth more than $4 billion.
  
Texas High-Speed Rail Company Loses Management Team
Engineering News-Record reported in its June 27/July 4 issue that the chief executive officer of Texas Central Railroad had resigned, along with the entire board of directors. Chairman emeritus Richard Lawless said he remains involved as a shareholder representative, and the company is currently being run by a senior manager from FTI Consulting, which has advised firms on bankruptcy and reorganization. Texas Central has planned to build a 236-mile high-speed rail system between Houston and Dallas. Legal challenges to right-of-way acquisition were settled last month when the state’s Supreme Court ruled that Texas Central can use eminent domain to acquire right of way. Inframation News cited cost estimates for building the high-speed line at between $18 billion and $30 billion.

Boring Company Gets Approval for Expanded Las Vegas Tesla Tunnels
The city of Las Vegas approved a 50-year non-exclusive agreement with Elon Musk’s Boring Company to build five miles of its Vegas Loop serving the downtown area with five stations. The agreement is similar to the one the company signed with Clark County last October for the other 29 miles of the 34-mile system. The company will cover the cost of building the system, while hotels and other venues will pay for stations on their properties. The completed loop will include both Allegiant Stadium and the Harry Reid Airport.

India Planning $4.5 Billion Highway P3 Leases
The National Highways Authority of India (NHAI) plans to offer 14 highway assets totaling 1,750 km on long-term P3 leases between now and March 2023, reports Inframation News (June 2, 2022). This announcement marks the continuation of India’s highway asset monetization, otherwise known as infrastructure asset recycling. Since 2018, NHAI has raised $2.2 billion from leases in its Toll-Operate-Transfer (TOT) P3 model, under which the wining bidder pays an upfront fee and takes responsibility for operating and maintaining the highway for the duration of the lease.

Google Maps Now Includes Toll Road Cost
Until recently, Google Maps implicitly treated toll roads and toll lanes as something to avoid, simply by warning drivers the “this route includes tolls,” even though such routes are generally the fastest option. But a new policy will include the real-time toll amount, enabling motorists to make an informed choice about the value of taking the faster tolled route. The June 14 Mashable article explaining the new policy shows a “Route Options” screen that Google Maps users can preset, to include “avoid tolls” or “see toll pass prices.” As of the date of the article, the feature was live for “nearly 2,000 toll roads in the U.S., India, Japan, and Indonesia,” with “more countries coming soon.”

Pennsylvania Turnpike Offers New Off-Line Cash Option
Because a fraction of its customers lack credit/debit cards, the Pennsylvania Turnpike last month announced a new option under which those customers can pay their toll bills using cash. The Turnpike is partnering with KUBRA Cash Payment Network, which operates kiosks in retail outlets such as 7-Eleven, Dollar General, CVS, and elsewhere. The Turnpike has completed its conversion to all-electronic tolling, via either E-ZPass Toll-by-Plate. The latter requires sending bills, and the KUBRA deal enables them to be paid in cash. Puerto Rico’s toll roads implemented toll transponder accounts in 2000, under which customers can replenish their accounts using cash at retail kiosks. Florida’s Sunpass system subsequently implemented a similar system.

Macquarie Rebalancing Highway Assets
Australian infrastructure investor Macquarie has announced two asset divestitures, and there is active interest in both. On June 14 it announced the sale of its majority stake in the Goethals Bridge P3 (between New Jersey and New York). Macquarie Asset Manager holds 90% of the 40-year DBFM concession. Separately, Macquarie is selling its interest in a portfolio of toll roads in India, with interest already expressed by investors Adani Transport, AP Moller, Cube, and KKR.

California Appeals Court Decries CEQA Abuse
The First District of the California Court of Appeal upheld approval of a 43-unit residential property, following what law firm Holland & Knight characterized as “years of NIMBY obstruction, government resistance, and numerous court challenges.” The court expressed dismay at the misuse of the California Environmental Quality Act (CEQA), which it said has devolved into “a formidable tool of obstruction” of needed projects.

Build America Bureau May Sell Stake in SH 130 Toll Road
In the bankruptcy of the concession company that financed and built the tolled 41 miles of SH 130 between Austin and San Antonio, Texas, the federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program converted its project loan into a 34% equity stake in the reorganized company. U.S. DOT’s Build America Bureau (which manages the TIFIA portfolio) is exploring the sale of its stake, according to several sources contacted by Inframation News (June 24, 2022). The majority equity holder, Strategic Value Partners, does not have plans to sell its stake, according to another source.

ASU Researching More-Durable Pavements
The Southwest Pavement Technology Initiative at Arizona State University is working with industry sources to develop recipes for stronger, more cost-efficient roadways. Another aspect of the project is pavement for autonomous vehicles—such as heavy trucks and their platoons. The results might inform future projects to add dedicated truck lanes to Interstate highways.

Privatize the York City Ferry?
A provocative commentary from the Independent Institute compares the performance of private ferry services in the New York City metro area with city-owned ferries, finding the latter as having high costs and low ridership. For example, in 2019 the cost per trip on the city’s ferries was $13.83, but the fare charged was only $1.00. Read the details here.

Correction to Last Month’s Article on Truck Electrification
Several readers pointed out an error in the article “Battery-Electric or Hydrogen Fuel Cell for Heavy Trucks?” in the June issue of this newsletter. In the paragraph comparing the weight of conventional, battery-electric, and hydrogen fuel cell tractors, the correct weight of the battery-electric tractor is 32,016 pounds, compared with 21,337 pounds for the fuel cell tractor and 18,216 pounds for the internal-combustion-engine tractor. The online version of the June issue has been corrected.

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Quotable Quotes

“Not only do community groups block explicitly green developments; they have weaponized environmental regulations in their quest to do so. . . . Although well-intentioned, these rules have provided a means for disgruntled locals to pile on delays to projects they don’t like, whether or not they have a legitimate environmental complaint. As the economist Eli Dourado has noted, environmental impact statements used to be pretty short—some just 10 pages. But after years of judicial decisions expanding what is expected from an EIS, the average length of these reports is now roughly 1,600 pages, and they can take 4.5 years to complete, all without actually requiring any environmental protection at all. The primary output of the regulation is delay.”
—Jerusalem Demsas, “Community Input is Bad, Actually,” The Atlantic, April 29, 2022

“Services designed to carry white-collar workers into city centers, such as the London Underground and commuter railway lines, are quiet because more of these people now toil in spare bedrooms and garden offices. Buses are busier because they are used by students, shoppers, and manual workers who cannot avoid traveling. . . .  Like Wile E.Coyote running off a cliff, politicians tend to talk as if nothing has changed. . . . But changes in working habits are likely to endure. A survey by the Office for National Statistics in early April found that 23% of all [UK] businesses and 43% of professional-services firms expect a permanent increase in home working.”
—“The Future of Transport: The Road Not Taken,” The Economist, May 21, 2022

“Location-based payment systems are as ubiquitous as a credit card. They are inexpensive to install in terms of physical infrastructure (GPS location based) and the back-office operations (text, email, and chat supported) are extraordinarily convenient. Immediate customer notification occurs automatically, identifying customer actions needed that can then be universally performed by the customers on their smart device. These payment systems offer the opportunity to easily and quickly subscribe to a payment service that can assist both frequent and infrequent users of transportation facilities. . . . These systems are being incorporated into onboard vehicle systems. While these systems are complementary to existing RFID operations, they also offer the opportunity to expand beyond toll roads to include parking, subways, buses, ferries, and other modes of transportation, as well as commercial transactions. This payment linkage will provide direct support for the ongoing maintenance and construction of transportation infrastructure.”
—Harold Worrall, “The Future of Toll Payment,” IBTTA Tolling Points, June 15, 2021

“The major question for pavements is whether or not our infrastructure is capable of sustaining the loads from those trucks traveling in platoons. In our research sponsored by the U.S. Department of Transportation’s University Transportation Center at the University of Michigan, we have been studying deformation resistance of different structures and mixes under different loading configurations associated with truck platoons.”
—Hasan Ozer, Arizona State University, in “Building Stronger, More Cost-Efficient Roads,” Arizona State University, June 10, 2022

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The post Surface Transportation News: Urban freeway teardowns, states accelerate highway expansion, and more appeared first on Reason Foundation.

• New report on private transportation finance
• DOT’s Safe Roads & Streets for All ignores most traffic deaths
• Intercity buses rebound but are still the forgotten mode
• A new approach to tolling interoperability
• Battery-electric or hydrogen fuel cell for heavy trucks?
• News Notes
• Quotable Quotes

New Report Documents Growth in Private Transportation Finance

Transportation and other revenue-generating infrastructure are routinely financed, built, and operated by the private sector in much of Europe, Australia, and Latin America. But this kind of long-term public-private partnership (P3) is still the exception to the rule for airports, seaports, and toll roads in the United States. A new report from Reason Foundation offers some perspective on this disparity.

Investors’ appetites to invest equity in revenue-generating infrastructure, including transportation, continues to grow. Infrastructure Investor reported that in 2021 investors worldwide put a new high of $136 billion into infrastructure investment funds—an industry that hardly existed 20 years ago. The publication also reported that over the past five years, the world’s 100 largest infrastructure funds raised a total of $791 billion. Investors in infrastructure funds include corporations, insurance companies, public pension funds, and sovereign wealth funds. In recent years, Europe has edged ahead of the United States as the headquarters location of major funds, at 41.5% of the five-year total raised, compared with 39.1% headquartered here in the United States.

The report includes tables showing what kinds of infrastructure these funds are investing in. In 2021, transportation was the largest category by far, at 58%, followed by electric power at 13% and public buildings at 12%. Another table shows that of the 15 largest “greenfield” transportation projects financed in 2021, only one small project was in the United States (Amtrak’s 30th Street Station in Philadelphia, at $527 million); the largest was the North East Link Motorway in Australia, at $8.4 billion. And of the world’s 25 largest transportation infrastructure developers, only one, Fluor Corporation, is based in the United States. Looking at public-private partnership developers of projects in the United States, all but one of the top 15 are European or Australian.

The United States is an outlier because our major transportation infrastructure projects are still largely procured under design-bid-build or design-build procurement. These traditional approaches focus on design and construction, which does not minimize a project’s life-cycle cost (by designing it more durably). They also leave ongoing maintenance in the hands of the state legislature, which is often more interested in funding new ribbon-cutting opportunities than in ensuring proper stewardship of the state’s transportation infrastructure. Design/build/finance/operate/maintain (DBFOM) public-private partnerships (P3s) address those concerns, but the ability to do such projects depends critically on state-enabling legislation. Although the National Conference of State Legislatures reports that two-thirds of states have P3 legislation, the majority of those laws are not state-of-the-art-as evidenced by the lack of any transportation P3 projects in most of those states.

Until recently, even the states with effective public-private partnership legislation and, ideally, a dedicated P3 unit with legal and financial expertise, did P3 projects one at a time. P3 companies and infrastructure funds lamented the lack of a “pipeline of projects” that would make it worthwhile for funds and companies to stay focused on those states and their transportation departments. Both Texas, until recently, and Virginia embraced revenue-financed DMFOM P3s enough to create ongoing interest, but they stood alone in doing so. But as the Reason report notes, the Georgia Department of Transportation has now committed to a pipeline of such projects to build out its planned express toll lanes network in metro Atlanta. Colorado and Louisiana DOTs are moving to second and third projects after successful initial highway P3s. And Maryland DOT—if its initial I-270/I-495/American Legion Bridge project survives ongoing challenges—hopes to go beyond that with express lane P3s for the rest of its I-495 Beltway. And the report notes other potential transportation P3s in Alabama, Indiana, Kentucky, Ohio, Kentucky, Oregon, and Washington.

One factor that might increase support for wider use of long-term revenue-financed transportation P3s is the growing commitment of U.S. public pension systems to infrastructure investment. The report chronicles new and increased allocations from state and local pension systems to infrastructure investment funds. However, public officials in those states, counties, and cities are very likely unaware that nearly all the projects being invested in by the infrastructure funds are in Europe, Asia, and Latin America. If public officials want more pension fund infrastructure investment to support U.S. projects, they should pass workable transportation P3 enabling legislation and encourage their state DOT to make use of revenue-financed P3s.

The Reason Foundation report, “2022 Annual Privatization Report: Transportation Finance,” is available here.

A companion report in this series, dealing with surface transportation, was also released recently. Its author, Baruch Feigenbaum, provides a summary here.

Last month Reason Foundation released our Annual Privatization Report Surface Transportation chapter examining 2021 developments. Unusually, not a single U.S. surface transportation P3 reached a financial close in FY 2021. The lack of projects is surprising because over the last 35 years the U.S. has built a total of 37 highway P3s, and three transit P3s. Of the 37 projects, 26 were financed based on toll revenues, and five others were financed based on availability payments but have state-collected tolls. The international P3 market was more dynamic. There were five projects with a value of $1 billion or more (in U.S. dollars). And Latvia, the Czech Republic, and Cameroon each closed on their first transportation P3.

COVID-19 is probably the biggest factor in last year’s lack of public-private partnership projects in the United States. However, recent changes in surface transportation law—the Infrastructure Investment and Jobs Act (IIJA) may increase the number of P3s. IIJA created a streamlined Transportation Infrastructure Finance and Innovation Act (TIFIA) application process. This process may reduce the time from loan application to loan award by 50%. And the new law also increased the lifetime private activity bond (PAB) cap from $15 billion to $30 billion. Several senators had been trying to raise the cap for years, but budget scoring which treats the loans as grants created some political heartburn. TIFIA and PABs are key components for P3 projects, providing 50% or more of the financing for some projects, increasing the number of projects that are viable as P3s.

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DOT’s Safe Roads and Streets for All Program Ignores Most Traffic Fatalities
By Marc Scribner

In April, the National Highway Traffic Safety Administration (NHTSA) began releasing its preliminary traffic fatality estimates for 2021. Its statistical projections produced a record-setting 42,915 road deaths, a 10.5% increase from the 38,824 traffic fatalities reported in 2020. This startling figure understandably captured a great deal of public attention.

In May, the U.S. Department of Transportation (DOT) announced the opening of the Safe Roads and Streets for All (SS4A) discretionary grant program, which was authorized by last year’s bipartisan Infrastructure Investment and Jobs Act to send $1 billion per year over five years directly to local, regional, and tribal government entities. The program intentionally bypasses state DOTs to focus on improvements to local roads. The problem is that most traffic fatalities occur on roads owned by state DOTs.

One notable project type eligible for SS4A funding is Complete Streets, which have been frequently touted by U.S. DOT during the Biden administration. Similar to the problem with SS4A’s general focus on local streets, the majority of U.S. traffic fatalities occur on road types ill-suited for Complete Streets roadway infrastructure treatments. Further, the few quantitative evaluations of Complete Streets implementations show a mixed record of achieving their ambitious goals. Taken together, it does not appear the SS4A discretionary grants are well-tailored to address the pandemic-era spike in traffic fatalities in the U.S.

To better understand the traffic safety problem, we need to look beyond the aggregate national figures. The table below uses NHTSA’s 2021 preliminary traffic fatality estimates subcategory report to display fatality rates (deaths per 100 million vehicle-miles of travel) and fatality counts and shares broken down by roadway functional classification for 2020 and 2021.

As the table shows, rural and urban local roads combined accounted for only 30.7% of traffic fatalities in 2021. While rural local roads had the highest fatality rate among the six roadway classifications, urban local roads had the lowest non-Interstate fatality rates. In contrast, rural and urban arterial roads accounted for 56.1% of fatalities, with rural and urban Interstates—the safest roads by functional classification—accounting for 13.2%.

U.S. DOT’s SS4A discretionary grant program excludes state DOTs from eligibility, so understanding who owns which roads by functional classification is important. The table below was compiled from the Federal Highway Administration’s Highway Statistics 2019, Table HM-50.

We can now estimate that approximately 53% of U.S. traffic fatalities take place on roads that are not eligible for SS4A funding. Excluding more than half of the places where roadway deaths occur from safety improvement funding by definition limits the safety-enhancing potential of the program.

Under SS4A, Complete Streets projects are likely to receive significant funding. Broadly stated, Complete Streets projects aim to de-prioritize motor vehicle travel and add transit, pedestrian, and bicycle enhancements to the roadway in order to meet various safety, environmental, economic, and social policy goals. A Complete Streets planning approach often combines “road diet” reductions in auto travel lanes with dedicated non-automobile infrastructure elements, intelligent transportation systems, and attention to streetscape aesthetics. Where road diets often involve merely re-striping lanes and are thus generally low-cost treatments for road agencies, Complete Streets projects add infrastructure to the roadway, so they are generally more expensive.

Despite being developed by planners associated with Smart Growth America two decades ago and increasingly adopted by U.S. cities, very little quantitative evidence exists to support the claimed benefits of Complete Streets. With road diets, there is evidence to support re-striping low-volume, non-major roads, but not busy high-speed arterials. A recent multiresolution modeling analysis of Complete Streets performed by Florida Atlantic University researchers found that the safety and transit efficiency benefits of Complete Streets may primarily arise from the deployment of intelligent transportation systems (specifically transit signal priority), not roadway geometry changes—which were found to increase the number of traffic safety conflicts per vehicle. Adult bicyclist fatality risk may be modestly improved, but excessively slowing auto speeds on arterials without reducing vehicle-miles of travel can increase air pollution and greenhouse gas emissions. Taken together, the benefits of Complete Streets appear to be highly context-dependent and there are numerous trade-offs.

Rather than prioritizing safety funding based on roadway ownership, a more effective grant program would prioritize funding based on where fatalities and injuries occur, regardless of the roadway owner. Another troubling aspect of SS4A, first highlighted by Eno’s Jeff Davis, is that the program strangely omits the typical mandated project benefit-cost analysis. This will likely further undermine the safety potential of the program.

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Intercity Buses Rebound, But Are Still “the Forgotten Mode”

Few people, even in transportation policy, realize that scheduled intercity bus companies serve five times as many cities and towns as Amtrak (2,639 vs 530 locations in 2019, per the U.S. DOT’s Bureau of Transportation Statistics). And the bus companies do it almost entirely without taxpayer subsidy. With their higher average load factors, intercity bus’s carbon footprint (CO2 emissions per passenger mile) is lower than that of Amtrak’s largely diesel-powered inter-city trains. Back in 2011, the Cato Institute’s Randal O’Toole produced a report titled, “Intercity Buses: The Forgotten Mode.” Alas, more than a decade later that is still the case. For example, in handing out huge federal COVID-19 bailouts to airlines, airports, transit, and Amtrak, Congress gave short shrift to intercity buses, whose ridership plunged just like the other modes.

Between 2006 and 2019, as documented in annual assessments by the Chaddick Institute at DePaul University, the intercity bus market grew by leaps and bounds as new companies such as Megabus, Bolt Bus, FlixBus, Megabus, OurBus, and RedCoach developed “asset-light” business models (not owning costly bus stations and in some cases not owning buses), offering higher-quality services, and using online reservations systems. While taking some market share from legacy operators like Greyhound and Trailways, the new entrants significantly expanded the market for intercity bus travel.

In 2020 the pandemic hit the industry very hard; intercity bus ridership in December 2020 was down 75% from the previous December. Congress responded by providing COVID-19 bailout funds to passenger rail and motorcoach operators: $4.3 billion to Amtrak and $1.5 billion to the motorcoach industry. But that industry includes school buses, tour buses, and airport buses (plus ferry services) in addition to intercity buses. Of all motorcoach operators, only 22% provide intercity services, so they received only a fraction of the nominal $1.5 billion compared with Amtrak’s $4.3 billion, despite intercity bus handling passenger numbers far greater than Amtrak.

But it gets much worse. In the Infrastructure Investment & Jobs Act (IIJA), Congress provided over the next five years $22 billion toward Amtrak’s huge backlog of deferred maintenance and also created a $36 billion program of grants for intercity passenger rail. In other words, these are massive new subsidies to expand Amtrak, enabling it to gain market share from largely self-supporting bus companies. Moreover, as Eno’s Jeff Davis pointed out in a report on Amtrak’s annual budget going forward, the numbers reveal planned annual losses of $1 billion per year, whose only source will be larger annual subsidies from Congress.

The Chaddick Institute’s latest report (Joseph Schwieterman, et al., “Routes to Recovery: 2022 Outlook for the Intercity Bus Industry in the United States”), released in February, offers a ray of hope for the intercity bus industy. Despite several carriers going under in 2021, FlixMobility acquired Greyhound Lines, and new services were offered in various regions such as New England, the Southeast, Texas, the Southwest, and the Pacific Northwest. Based on their long-standing familiarity with the industry, the Chaddick researchers predict that intercity bus traffic will reach 80% of pre-pandemic levels in 2023, while McKinsey & Co. forecast 90% in 2023 and 105% in 2024. New first-class services by Landline, RedCoach, ROX, and The Jet suggest that intercity bus is attracting a higher-end clientele. Chaddick also sees opportunities for Amtrak to contract with motorcoach operators as it expands its Amtrak Thruway bus system.

Nevertheless, given the large role that intercity bus companies play in intercity passenger traffic, it is tragic that Congress lavishes unheard-of billions of taxpayer subsidies on Amtrak so it can compete with a generally self-supporting intercity bus industry that serves five times as many locations and has a considerably smaller carbon footprint. 

Note: Some dated but still useful sources that compare intercity buses to Amtrak are the following:

• M.J. Bradley & Associates, “Comparison of AMTRAK Trips to Motorcoach Trips,” April 2013. This report compares cities served, passenger volumes, and carbon footprints, but is nearly a decade old. A new version would be very useful.
• Union of Concerned Scientists, “Getting There Greener: The Guide to Your Lower-Cost Vacation,” UCS Publications, 2008. This report compares the carbon footprint of intercity trips by bus, train, car, SUV, and plane as of 14 years ago, showing that motor coach was always the lowest-carbon option. A newer version is online, from 2019, with the same tables and conclusions but without the actual comparative numbers.

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A New Approach to Tolling Interoperability
By Baruch Feigenbaum

As part of the passage of the 2012 surface transportation reauthorization bill. Moving Ahead for Progress in the 21st Century (MAP-21), Congress included a provision, section 1512b, which required that all toll roads have interoperable electronic tolling by the end of 2015. Flash forward seven years and nationwide interoperability remains an elusive goal.

There has been progress. All toll agencies in four multi-state tolling consortiums are interoperable with each other. Several years ago, I drove from Northern Virginia to Detroit, passing through four E-ZPass states. Unfortunately, those states’ toll roads had different business rules. Maryland and Virginia allowed a customer’s E-ZPass account to dip below zero while Ohio and Pennsylvania did not. On my return trip a gate on the Ohio Turnpike slammed down on my car, and I had to go to a toll booth and pay by credit card, defeating the whole purpose of interoperability.

One barrier to interoperability is that there are six different transponder technologies. Illinois uses TDM, Michigan uses 6C, and Minnesota uses SeGo and TDM. And that is just in the upper Midwest. In some states, different highways or parts of highways accept different transponders. In Florida, for example, the part of the Beachline Expressway connecting Orlando International Airport and Sand Lake Road is operated by the Florida Turnpike Enterprise which accepts E-ZPass. The part between Sand Lake Rd and I-4 is operated by the Central Florida Expressway Authority, which until recently did not accept E-ZPass, which created problems for vacationers from the Northeast and Midwest.

Another barrier is political. Engineers know what changes to implement to allow the different technologies to communicate with a single transponder. Moving forward, will all toll agencies stick with their current transponder or choose a universal transponder? It would be simpler if all toll agencies chose one transponder. But that would also require many of them to change the equipment at each tolling location that communicates with transponders. E-ZPass is the largest regional tolling hub. But it also has the oldest technology, requiring a bulky box instead of a sticker tag. So which transponder technology wins, the one that serves the most customers or the one that is the most technologically advanced?

This confusion is not only bad for customers; it’s bad for toll road operators. For example, the average toll agency fails to collect 5% of toll revenue, mostly for tolls from video (license-plate) tolling, for which they must send out bills. The two biggest problems leading to non-payment are a lack of a vehicle owner’s current address and image rejection. But public confusion also plays a role. And that 5% total can be millions of dollars in lost revenue.

With interoperability remaining elusive, toll agencies continue to develop regional interoperability hubs. A presentation at a recent International Bridge, Tunnel, and Turnpike Association (IBTTA) conference provided an update on the four regional hubs: a 29-member E-ZPass hub, a 12-agency southeast hub, an 8-agency central hub, and a 13-agency western hub. I support anything that brings us to true interoperability, but this seems a confusing and convoluted way to get there. The public sector has been working on this for more than 10 years, so maybe it’s time to let the private sector take the lead.

In fact, drivers of 2019 and newer Audis and 2021 and newer Mercedes Benz E-Class vehicles already have another option—a built-in universal transponder. So do a growing number of long-distance truckers. BestPass, the leading company that provides toll transponders to truck fleets, also processes the transponder toll transactions for automobile drivers through its Payviam program. The transponder is built into the rearview mirror produced by supplier Gentex, so drivers don’t need a windshield sticker tag or box. Instead of setting up an account and pre-paying with a toll agency, drivers prepay with Payviam.

What are the advantages of Gentex rearview mirror technology with Payvium versus a traditional transponder? The most obvious is that a driver can travel in multiple states without the need to worry about interoperability, carry cash, or face surcharges from paying video tolls based on license-plate imaging.

But there are also several less obvious advantages. The window tinting in some newer automobiles makes it challenging for antennas to communicate with transponders. Those drivers need other payment options for toll roads. By including the transponder in the mirror housing, window tinting is no longer a concern.

Some drivers of higher-end luxury vehicles don’t like the aesthetics of a bulky box taped to their front windshield. While this is not a problem that I have experienced, owners of vehicles selling for more than $100,000 feel differently. Many drivers treat their vehicle as their second home. And they don’t like extra clutter on their windshield any more than they like olive green paint in their master bedroom.

Finally, private companies offer value-added services. Flyers can pay for airport parking using Payviam at major airports including John F. Kennedy International Airport, Ft. Lauderdale, LaGuardia, Miami, Newark, and Orlando. And they offer a way to pay for performances at venues such as Hard Rock Stadium. If our New York City traveler tires of driving to Florida she can fly and pay for airport parking using Payviam. And the company is testing other features including in-vehicle diagnostics and advanced mapping features.

While only some vehicle manufacturers build toll modules into their vehicles, the number is expected to grow as tolling increases. For owners of vehicles with the technology, Payvium seems like a better option than waiting for public toll agencies to solve the interoperability problem.

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Battery-Electric or Hydrogen Fuel Cell for Heavy Trucks?

The debate over how best to electrify America’s trucks continues, with advocates of battery-electrics squaring off with partisans of hydrogen fuel cells. The debate even made The Wall Street Journal last fall, with William Boston’s full-page article, “The Coming Battle Over Electric Trucks,” Nov. 10, 2021. Everyone agrees that, as of now, battery electric vehicles (BEVs) are far ahead in trucking, as they are in personal vehicles. But heavy-duty BEV trucks, especially Class 8 big rigs used for long-distance hauls, are severely range-limited (perhaps 200 miles at best) and require several hours to recharge, even at largely non-existent high-voltage, fast-charging stations. On the other hand, while hydrogen fuel cells can apparently provide up to a 500-mile range and can refuel in minutes, there is even less hydrogen fueling infrastructure than EV charging. Not only that, but the conventional method of obtaining hydrogen (electrolysis of water) is very energy-intensive and has a large carbon footprint.

I’ve been following the debate in trucking media this year, starting with Jim Stinson’s scene-setting piece at TransportDive on Jan. 25, “Battery-electric vs. Hydrogen Trucks: The Debate Heads into 2022.” Fleet Owner featured a lengthy article on Feb. 14, “What Fuel Source Will Dominate Trucking in 2030?” It covered a debate sponsored by the North American Council for Freight Efficiency (NACFE), live-streamed on LinkedIn on Feb. 9.

• Allen Schaeffer of the Diesel Technology Forum argued that today’s dominant engine continues to be improved and there are 140,000 diesel fueling stations nationwide, so diesel will be a key player for many years.
• Colin Murphy of the University of California-Davis Policy Institute predicted that battery-electric will dominate even the Class 8 fleet in coming decades as the most practical way to reduce trucking’s carbon footprint. He said that hydrogen is only half as energy-conversion-efficient as battery electricity.
• Craig Scott of Toyota North America countered that the price of hydrogen has fallen over the past decade, there are numerous prototype Class 8 hydrogen fuel cell trucks from major manufacturers on the road in testing, and that range, much lower weight, and quick refueling will make hydrogen the winner.

My own assessment at this point is that battery electric looks likely to be the early winner for small and medium trucks that operate locally, drive 100-200 miles per day, and can recharge overnight at a central yard. That would include municipal and school buses, tow trucks, garbage trucks, and many other such passenger, service, and freight vehicles.

The real contest is for heavy, long-distance trucks where range, weight, refueling time, and infrastructure needs will all be key decision factors. And there is also the question of which alternative is greener. After all, if the driving force for heavy truck electrification is carbon footprint, that will also have to be factored into the decision, whether because of regulatory mandates or company reputation. And regardless of which energy source is technically “more efficient,” that will always matter to engineers, but cost tends to win out in the end.

One of the most comprehensive assessments of electrification trade-offs for Class 8 trucks was released last month by the trucking industry’s American Transportation Research Institute (ATRI). “Understanding the CO2 Impacts of Zero-Emission Trucks,” by Jeffrey Short and Danielle Crownover, is available here.

The study develops a comprehensive quantitative assessment of the life-cycle CO2 emissions of three Class 8 sleeper cab trucks (the kind used for long-haul trucking): internal combustion engine (ICE), battery electric vehicle (BEV), and hydrogen fuel cell electric vehicle (FCEV). The three components analyzed for each are vehicle production, energy production and consumption, and vehicle disposal and recycling. Both costs and CO2 emissions are estimated for each component of each vehicle The analysis begins with the internal combustion truck, for which data are readily available. The researchers needed to make some assumptions about the additional costs of producing a BEV or FCEV truck and the best estimates of the CO2 emissions of each component for each vehicle.

You can read the details in the ATRI report. One of the first tables that caught my eye was the comparison of weights of the three alternatives. While the FCEV tractor is estimated at 21,337 pounds (17% more than the ICE tractor), the BEV totaled a whopping 32,016—76% more than the ICE. And that’s for a BEV’s battery system designed for no more than a 300-mile range. The additional weight of the BEV will reduce its payload capacity, which will reduce its productivity.  

Another interesting table estimates the comparative CO2 emissions of the vehicle propulsion, including its power supply. Here again, the BEV is the big loser, due to the much larger CO2 emissions involved in producing the battery, especially. Another table estimates the energy needed for each truck to operate for one million miles. That figure for each of the three is used to estimate the carbon footprint of (1) producing the energy to be used in operating the truck and (2) emissions from actually operating the truck.

The result of those calculations is that the ICE would emit 3.6 million lbs. of CO2 over its million miles of operation, compared with 2.1 million lbs. for the BEV and 1.9 million lbs. for the FCEV. One more set of calculations estimates the CO2 emissions from end-of-life disposal/recycling of the vehicle. Here again, the BEV is the big loser, at 50.5 thousand pounds compared with 2.8 thousand for FCEV and 2.3 thousand for ICE. It’s that darn battery that’s the culprit.  

Finally, Table 12 pulls together the CO2 emissions from tractor production, energy production and use, and disposal, with ICE at 3.7 million pounds, BEV at 2.6 million pounds, and FCEV at 2.0 million pounds.

Table 14 takes a closer look at payload trade-offs among the three alternatives. Big rigs do not always operate at their maximum allowable gross weight of 80,000 pounds. The average cargo weight, per the data used in the study, was 32,811 pounds. By factoring in the tractor weight (much heavier for the BEV), trailer weight, and average cargo weight and subtracting that from 80,000 pounds, the table shows that the BEV would have less than 4,000 pounds. available for higher-than-average cargo, while the ICE has 18,000 pounds, and the FCEV has 14,600 pounds.  

I’m sure there will be quibbles about aspects of the methodology ATRI used, but this strikes me as an excellent baseline against which investors, climate regulators, and truck owners/operators can start assessing the business case for Class 8 BEVs versus FCEVs. Acquisition cost, range, refueling time, and available energy/refueling infrastructure are also going to be significant factors in the timing of Class 8 truck purchases. This study reinforces my preliminary assessment from a year or two ago that for long-distance Class 8 trucks, hydrogen fuel cells are likely to emerge as the eventual winner.

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News Notes

New Virginia Express Toll Lanes to Open by Year-End
The $3.5 billion P3 project to add 22.5 miles of express toll lanes to I-66 outside the Beltway in Virginia is on schedule to open before the end of 2022. The project has basically rebuilt this entire stretch of congested Interstate, which links exurbs and suburbs to the District of Columbia/Arlington/Alexandria metro area. The project was procured as a design-build-finance-operate-maintain (DBFOM) P3, under a 50-year concession. Unlike most revenue-risk P3s, this project was privately financed without any state government investment. It is the latest in a series of express toll lanes developed by the U.S. division of Cintra, whose other ETL P3s are in Charlotte, Dallas, and Ft. Worth.

Athens Ring Road Attracts Eight Potential Bidders
The Athens ring road toll motorway network was developed in the 1990s under a P3 concession that expires in 2024. Greek privatization agency Hellenic Republic Asset Development Fund has put a renewed concession up for expressions of interest, offering a 25-year concession. Inframation News (May 5, 2022) reported that eight consortia have responded to the EOI, including such major players as Abertis, Brisa, Egis, Macquarie, and Vinci Concessions. Based on a previous Greek toll road concession that was valued at €1.5 billion last year, expectations are that the winning team may bid €2 billion or more. HRADF is expected to announce a shortlist by the end of June.

Puerto Rico to Offer Toll Roads as One P3 Concession
The Puerto Rico Public-Private Partnerships Authority has decided to offer all the island’s toll roads (except for already privately managed PR5 and PR22) as a single P3 concession. This option was assessed as the best way forward in a study conducted for the Authority by KPMG, according to Inframation News. The concession term is expected to be 40 to 50 years, and the winning bidder will be expected to put in at least $500 million in capital improvements for the toll roads. The Highway and Transportation Authority is expected to use the up-front proceeds to reduce its $6.4 billion debt.

Unpacking an Induced Demand Fallacy
You have likely read one or more articles about a freeway improvement that ended up not meaningfully reducing peak-period travel time. The fallacy involved in deeming this a failure is explained cogently in a piece called “Traffic Improvements and Government Waste,” produced by CallingBullshit.org. Basically, what is left out is the effect of the improvement on the whole network, which tends to redistribute traffic flows in response to improvements in one part of the network. Check it out here.

Pennsylvania DOT Appeals Bridge P3 Injunction
The Public-Private Transportation Partnership Board of PennDOT suffered a setback to its billion-dollar Major Bridge P3 Initiative when a Commonwealth Court judge issued a preliminary injunction on May 18 to halt the agency from proceeding with the initial stage. The plaintiffs claim the P3 law itself is unconstitutional and, that in any case, PennDOT did not follow proper procedures in identifying nine aging Interstate highway bridges in the state to be repaired or replaced via toll-financed P3s. PennDOT promptly filed an appeal, but this legal problem appears to put on hold the start of work by the winning consortium headed by Macquarie Infrastructure Development.

TET Coalition Launches Another MBUF Truck Pilot Project
The Eastern Transportation (TET) Coalition is embarking on its third mileage-based user fee (MBUF) pilot project involving commercial highway trucking companies. This project will include additional vehicle types, some cross-border (U.S.-Canada) trips, continue work with the Motor Carrier Working Group on commercial vehicle rate-setting based on registered weight, and a “proof of concept” effort with two international organizations—the International Fuel Tax Agreement (IFTA) and the International Registration Plan (IRP), which might play key roles in a multi-state/province commercial truck MBUF system.

INRIX Tracks Downtown Traffic Declines
In a new report, transportation data firm INRIX documents that in 10 of America’s largest cities, all but two have less downtown traffic than prior to the COVID-19 pandemic, in contrast to recovered traffic volumes in their suburbs. The only two downtowns that have recovered are Denver (101%) and Nashville (125%). By contrast, downtown Washington, DC traffic has reached only 70%, Dallas 75%, and New York 88%. “‘Back to Office’ Traffic & Activity Report,” May 2022

Suburbs More Popular than Central Cities Since Pandemic
In the April 30 issue of The Economist, an article illustrates with maps and charts how the pandemic has changed American homebuyers’ preferences. The main data source is Zillow’s monthly home price index, showing home-price growth in the suburbs and declines in central cities. One factor in this change is that younger Americans increasingly look for their first home purchase in suburbs rather than downtown. Political scientist Samuel J. Abrams summarized survey data on this in a blog post for the American Enterprise Institute on May 18, 2022.

EV Charging at Interstate Rest Areas Gains More Support
Politico reported last month that a group of electric vehicle companies sent a letter to the heads of the Departments of Energy and Transportation urging that federal EV charging infrastructure plans must include long-distance heavy-duty electric trucks. The Multi-State ZEV Task Force of NESCAUM (a consortium of Northeastern state governments) in March issued a “Multi-State Medium- and Heavy-Duty Zero-Emission Vehicle Action Plan” that identified the federal ban on commercial activities at Interstate rest areas as a serious barrier to EV charging for heavy trucks. And a survey by Volkswagen of 1,200 of its EV customers found that “over 80% want to have new fast-charging stations located at existing filling stations and rest stops where there are places to eat,” as reported in the June 2022 issue of The Dispatcher. 

New Express Toll Lanes Under Construction
Another link in the emerging network of express toll lanes in the San Francisco Bay Area began construction in May. The $243 million project will implement ETLs along 10 miles of I-80 between Fairfield and Vacaville, converting existing HOV lanes and adding an additional tolled lane each way. In northern Virginia, work has just begun on a northward extension of the ETLs on I-495, to the American Legion Bridge. Also in northern Virginia, the latest southerly extension of the I-95 ETLs has encountered delays due to clay and silt-laden soils along portions of its 10-mile route. The revised completion date is now late 2023.

Satellite Monitoring of Pavement Condition in Texas
Synthetic Aperture Radar (SAR) based on earth-orbiting satellites is now being used to monitor possible ground displacement beneath the pavement on SH 130 between Austin and San Antonio. Doug Wilson, CEO of the SH 130 Concession Company, told Engineering News-Record that the imagery yields maps that show ground-surface displacement in the millimeter range. More than 30,000 points along the toll road are measured every six days and compared with seven years of historical data. (C. J. Schexnayder, “Texas Toll Road Tries Satellite Sensing for Maintenance, ENR.com, May 16/23, 2022) 

California High-Speed Rail News: Planned Extension but No Money
The California High-Speed Rail Authority approved moving forward with a 90-mile extension, from Merced in the Central Valley to San Jose. At the same time, California legislators are refusing to authorize spending $4.2 billion from the 2008 HSR bond measure amid debates over possible battery-powered trains and about spending some or all of that money improving urban transit in the Los Angeles and San Francisco metro areas instead. One estimate of the cost of the link between Merced and the peninsula is $22 billion, due to the extensive tunneling required.

Louisiana Legislature OKs Down Payment on $2.5 Billion Mississippi River Bridge
The planned Baton Rouge bridge across the Mississippi will get a $300 state contribution toward what is expected to be a largely toll-financed public-private partnership project. Legislators also allocated $200 million for the replacement Calcasieu River Bridge P3, which is already in procurement. State DOT Director Shawn Wilson said the bill “does really good work” in funding needed predevelopment work on these important new bridges.

Is New San Francisco Subway a Boondoggle?
After many years and cost overruns, the 1.7-mile Central Subway in downtown San Francisco is now “nearing completion,” at an estimated cost of $1.6 billion—nearly a billion dollars a mile. Now in the planning process is a 1.3-mile Downtown Rail Extension (DTX) at a cost estimated at between $4.5 and $5 billion—about $3.5 billion per mile. My Reason colleague Marc Joffe wrote a thoughtful assessment of this project that you can find here.

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Quotable Quotes

“Transportation policy is, of course, still a critical area, and the administration and many local governments’ focus on mobility is largely about transit. Outside older ‘streetcar suburbs,’ however, exurbs are almost totally auto dependent. The administration’s transportation secretary, Pete Buttigieg, embraces the idea of getting Americans out of their cars and into trains and buses. For at least half a century, this has been a principal public policy objective—and the results have been spectacularly unsuccessful. Despite the expenditure of more than $2 trillion and the construction of many new rail systems, transit’s share of daily commute trips dropped 44 percent from 1970 to 2019 (from 8.9 percent to 5.0 percent). Even prior to Covid, more people worked at home than took transit, which already accounted for less than two percent of all urban travel.”
—Joel Kotkin, “Exurbia Rising,” American Affairs, Feb. 20, 2022

“Rich countries should accept this new reality and start building transport systems to match. Infrastructure projects that just add capacity to conventional suburb-to-city-center routes now seem pointless, especially in the biggest cities. They are rooted in the idea that urban travel is like an asterisk, or the spokes of a wheel, with people squeezing onto radial roads and railway lines. Travel is now more like a spiderweb. People take fewer, often-shorter journeys along thinner routes; they move to the side, as well as in and out. That explains why buses, which are often used for short journeys, have emptied out less drastically than commuter trains.”
—Leader, “From Asterisks to Spiderwebs,” The Economist, May 21, 2022

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The post Surface Transportation News: Private infrastructure financing growth, intercity buses rebound, and more appeared first on Reason Foundation.

In this issue:

• Anti-highway lobby escalates its rhetoric
• Feds open the door to electricity on highways
• Hyperloop’s still-unanswered questions
• Should electric vehicles help power the grid?
• FRA sued for veto of automated track inspection
• Why free transit is not green
• News Notes
• Quotable Quotes

Anti-Highway Lobby Escalates Its Rhetoric

On April 26, a collection of anti-highway groups announced the formation of the Freeway Fighters Network. Its announcement said the coalition involves “about 35 local groups and 230 individual members involved in fighting over 60 highway projects across the country.” They aim to shift funding from highway capacity expansion/reconstruction to “multimodal infrastructure, community development, and reconnecting communities that were divided by freeways.” They also seek to “upend a 70-year-old system of car dependency and commuter culture and replace it with a more diverse transportation system.” Among the founding members is the Congress for the New Urbanism, which has touted freeway teardowns for many years.

Supporting these anti-highway efforts is a series of op-eds claiming that all highway capacity expansions are being promoted despite the ‘iron law of freeway congestion,’ which allegedly means that any such highway expansion is a waste of money because the new lanes quickly fill up and are congested so the supposed net gain for building them is zero (but at a huge cost). An especially egregious example of this is a piece by Charles Marohn of Strong Towns, “Ignoring Induced Demand Is Engineering Malpractice.”

It’s an anti-highway piece dressed up as an analysis of a highway widening study in Loudon County, VA. The author tries to make the traffic engineers look like idiots by claiming that they deny the existence of induced demand when data show the phenomenon exists but is nowhere near as broad or sweeping as typically portrayed by anti-highway people. For example, the often-cited academic paper that introduced the idea of an “iron law” of freeway congestion measured only post-widening trip volume on the freeway, neglecting to consider or quantify the extent to which already-existing trips shifted from parallel arterials to the freeway, since the latter now offered faster and more reliable travel times than the arterial. This serious point is dismissed out of hand by Marohn.

My go-to resource on induced demand is transportation researcher Steven Polzin, formerly at the University of South Florida’s Center for Urban Transportation Research and more recently a senior advisor for research and technology at the U.S. Department of Transportation (DOT). Polzin, now a research professor at Arizona State University, circulated a brief commentary on the Marohn article to transportation colleagues, where he made the following points:

• “Yes, there is induced demand, but a whole bunch, and in many cases the vast majority, of the demand is not induced and can necessitate new capacity in some locations.
• “Induced demand isn’t what it used to be. Lessened diversion from other modes, the option of communication substituting for travel, near-saturation in vehicle availability (and the plateauing of VMT per capita), and environmental sensitivities all dampen the propensity for induced travel to a greater extent than when the majority of induced demand measures were developed.
• “Induced demand isn’t necessarily bad or wasted VMT. Being able to get to a better job or access venues that offer better choices and lower costs isn’t bad. Businesses having access to a bigger labor pool and potential customer and supplier bases isn’t bad. Making those supply chains work better isn’t bad. Getting emergency vehicles where they need to go, faster, isn’t bad. Pulling cut-through traffic out of neighborhoods isn’t bad. Using infrastructure to shape development or improve economic competitiveness of given geographies isn’t bad.
• “Finally, the way too broad-brush characterization of planners as road-building zealots indifferent to the public will is as repulsive as the too-often characterization of planners as insensitive racists steering bulldozers through minority neighborhoods.”

Polzin’s longer and more comprehensive discussion of induced demand is available in a recent policy paper from Reason Foundation: “Induced Demand’s Effect on Freeway Expansion”

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Feds Open the Door to Electricity on Highways

In a potential breakthrough, the Federal Highway Administration (FHWA) has published guidance material regarding the possible use of rights of way of federal-aid highways for renewable energy, alternative fueling, electrical transmission and distribution, and broadband projects. This might open the door to electric vehicle charging facilities at Interstate highway rest areas, depending on how FHWA’s language is interpreted.

I learned of this development thanks to the release of a report called “NextGen Highways Feasibility Study for the Minnesota Department of Transportation: Buried High-Voltage Direct Current Transmission.” A key participant in the study was the Atlanta-based nonprofit organization The Ray, which has been researching such projects for a number of years. The Ray partnered with NGI Consulting for the project with the Minnesota Department of Transportation (DOT). One of the interesting findings in the study is that Wisconsin is far ahead of other states in allowing the use of existing highway right-of-way (ROW) for electric transmission facilities, so long as the installations don’t interfere with present or future highway functionality. It enacted enabling legislation in 2003, and a relatively new transmission-only utility—American Transmission Company—began its first project there in 2005. Wisconsin DOT and utility regulator Public Service Commission of Wisconsin entered into a cooperative agreement on new transmission lines in Interstate and freeway ROW in 2009. More recently, Maine and New Hampshire have also taken steps in this direction.

The Minnesota study drew on these prior state efforts, plus the new FHWA policy, to suggest that Minnesota begin planning to do likewise. There are several reasons why long-distance highway ROW would be a good location for new high-voltage DC transmission lines, as well as other linear infrastructure such as broadband. Ambitious U.S. plans for greatly increased electricity use (not least for future vehicle propulsion) will require a major expansion of both electricity generation and long-distance transmission. Yet just like other major infrastructure (pipelines, highways, etc.), new electric transmission lines generally face some combination of NIMBY and environmental group opposition. Buried high-voltage DC lines on the right of way that already exists will likely circumvent much of that opposition. Legislators and state transportation departments in other states should be looking into this subject as a possible win-win for transportation and energy.

The Minnesota study also produced a useful guide, called “NextGen Highways: Overview of Federal and State Policy.” It reviews current federal law and regulation of highway ROW. This includes a discussion of an FHWA memo from April 27, 2021, “State DOTs Leveraging Alternative Uses of the Highway Right-of-Way Guidance.” The memo says that state DOTs can leverage highway ROW for “pressing needs relating to climate change, renewable energy generation, electrical transmission and distribution projects, broadband projects, vegetation management, inductive charging in travel lanes, alternative fueling facilities, and other appropriate uses.”

The italicized uses are defined as Clean Energy and Connectivity (CEC) projects. They can be accommodated in the ROW either as a utility under 23 CFR 645 or as an alternative use of ROW under 23 CFR 710. It also explains that CEC projects can be located at rest areas and “are not prohibited as a commercial activity under 23 USC 111” (which is the law that prohibits commercial activity at Interstate rest areas).

But the built-in contradiction in this policy is that alternative fuel facilities cannot charge for electricity or hydrogen provided to vehicles. And that, of course, means that nobody will invest the considerable capital in building and operating electric vehicle charging facilities at rest areas or anywhere else along or within Interstate highway ROW. Yet profit-making electric utilities and broadband companies can use Interstate ROW for transmission lines whose users will pay for the services those new lines provide. If FHWA cannot see a way to get beyond this contradictory policy, it will be up to Congress to change the law, accordingly—the sooner the better.

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Hyperloop’s Still-Unanswered Questions

There have been good news and bad news developments for fans of hyperloop—the futuristic idea of providing 600 miles per hour passenger and freight service using magnetically levitated and propelled vehicles traveling in evacuated tubes—an idea that I studied in an MIT student project in 1964 and which Elon Musk revived as a concept about a decade ago.

The bad news came on Feb. 22, when Virgin Hyperloop announced that it would shift its focus from passengers to freight, as a less-risky business plan. The good news arrived on April 25, when Elon Musk announced that his tunnel company, The Boring Company, plans to build a “full-scale” working hyperloop to demonstrate its feasibility. The announcement (with few other details) was made about a week after The Boring Company raised $675 million, for an estimated market value of $5.7 billion.

Alas, neither the technical nor economic feasibility of hyperloop has come anywhere near to being demonstrated, despite all the hype from several start-up companies. I wrote two critiques of hyperloop in this newsletter in 2020, “A Closer Look at Hyperloop Feasibility” in the July 2020 issue and “Hyperloop, Yet Again” in the August 2020 issue. Each reviewed various hyperloop feasibility studies, which did not address unanswered technological questions or provide credible benefit/cost assessments.

Here are some of the technology unknowns.

• 600 miles per hour or higher speed is a potential hyperloop advantage in shifting customers from air and highway travel. Thus far, nobody has built an evacuated tube long enough to demonstrate that such a vehicle could accelerate to reach that speed and then decelerate. It would be many miles long and very costly to build. So we cannot yet take that speed and time advantage seriously.
• Maintaining the vacuum in the tubes has also not been demonstrated in a realistic tube, nor have there been any available numbers on the energy cost of operating the system, both propelling the vehicles and operating the pumps to maintain the vacuum.
• Airlocks at stations do not appear in any published conceptual study. How they will work, and how much they will cost, are unanswered questions.
• Switches to divert hyperloop vehicles from one tube to another have been shown on maps in some studies, but no designs or cost estimates have been presented.
• Emergency evacuation does not appear to have been considered in the studies I’ve reviewed, but it’s hard to imagine federal safety certification of hyperloop without the inclusion of such facilities. That’s yet another cost.

Then there are questions about economic feasibility. 

To finance a toll road, an airport terminal, or a new pipeline, investors need to see and vet an investment-grade traffic and revenue study. Nothing approaching that has been released for any proposed hyperloop line. The 2020 “Hyperloop Feasibility Study” for the proposed Chicago to Pittsburgh system made aggressive assumptions about passengers and freight diverted from air and highway modes due to both time saving and “affordable” fares, which is at odds with a more realistic study from Lux Research estimating that the high cost of hyperloop would seriously limit passenger and freight demand.

The same 2020 study did a benefit/cost assessment that claimed to follow U.S. DOT methodology, but it used a 3% discount rate rather than the 7% required in federal agency work by the Office of Management & Budget. It counted travel time and operating cost savings of $5.9 billion, but did not account for corresponding losses in market share by airlines and trucking companies (or lost revenue to toll roads in the corridor). Yet even with the inflated benefits of $18 to $19 billion, the estimated cost of the infrastructure ($26.9 billion) suggests that costs significantly exceed benefits.

The engineer in me is excited by concepts like hyperloop, and perhaps the technical problems noted above will be solved someday. But it’s also my engineering background that serves as a hype detector for concepts that have many thus-far unsolved problems. Federal and state DOTs should proceed with caution, insisting on independent benefit/cost studies, and if a proposed hyperloop project passes that test, then insisting on independent investment-grade traffic and revenue studies. Taxpayers should not be required to support hype-loops.

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Should Electric Vehicles Help Power the Electricity Grid?

When I first heard this idea about a decade ago from an academic economist, I was dumbfounded. People who buy electric vehicles need to buy electricity from the grid, to ensure they can get where they want to go, especially at unpredictable times. Why would they want to deplete the stored electricity in their EV, even if the electric company paid them for the transferred power?

Yet today the idea is being taken seriously by various advocates of sustainability and reduced carbon footprints.  Here is just a small sampling of recent news articles on this idea:

• “Battery Pioneer Suggests Letting EVs Power the Grid to Go Green,” Bloomberg News, Dec. 12, 2021
• “GM, PG&E to Test Program for EVs to Boost Power Grid,” The Wall Street Journal, March 9, 2022
• “Give and Take: The [Porsche] Taycan as a Buffer,” Electric Car News, April 11, 2022.

The project under way by General Motors and California utility PG&E is intended to enable EV owners to use the electricity stored in the vehicle to power their homes during outages of utility power (as have been frequent in parts of California recently, especially where wildfires threaten power lines). Another idea to be considered by GM/PG&E is to use stored EV electricity to supplement the electricity grid during peak demand periods—so-called vehicle-to-grid (V2G) power.

In Germany, Porsche and grid operator TransnetBW are testing a slightly different V2G application. In the project, an off-the-shelf electric Taycan EV was connected to the power grid via the Porsche Home Energy Manager (HEM). The test showed that it is possible for stored electricity from the EV to be used to stabilize the grid, by providing balancing power to offset fluctuations.

My concern is not with the technical feasibility of V2G and related concepts. Assuming it works, the real questions are: Who would actually do this, and how much of a difference would it make? Here are three examples where human behavior must be taken into account.

First, consider some kind of emergency situation—a California wildfire nearby, an impending hurricane where one might need to evacuate, etc. Yes, electric power from the grid might be cut off (either from the emergency itself or deliberately, as PG&E does pre-emptively to reduce downed wires starting new fires). In that kind of situation, why would an electric vehicle owner risk draining the vehicle’s full charge, when she has no idea how long the outage will last after the emergency, especially if it turns out she may need to evacuate on short notice? And if she owns a relatively low-range EV, the need to retain its full charge will be even more important.

Second, consider an EV used for everyday commuting. In this case, the owner might be willing to sell overnight a modest amount of its accumulated charge, being sure to retain enough for at least the next day’s commute and various stops along the way. Presuming that selling electricity to the power company is voluntary, it will be essential for the EV owner to be able to limit the amount sold, to preserve her mobility options.

Finally, selling electricity to help stabilize the grid would require currently unknown amounts of V2G sales per day. Again, assuming such sales are voluntary, a key question for the grid operator is how much “balancing power” would it need, and how many customers would be willing to sell what amount of electricity each day for that purpose. Those numbers are unknown, as far as I can tell.

In all three of these examples, a critically important factor is the behavioral feasibility of this idea. Sure, electric utilities can offer various rates they are willing to pay for V2G electricity, but the success or failure of these new uses for EVs’ electricity will depend at least as much on how consumers choose to behave as on the technical feasibility of V2G. And that is currently unknown.

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FRA Sued for Veto of Automated Track Inspection
By Marc Scribner

On April 14, BNSF Railway sued the Federal Railroad Administration (FRA) for arbitrarily denying BNSF’s petition to expand its successful automated track inspection (ATI) program. In recent years, several major railroads have deployed ATI in various degrees on their networks with the support of FRA. The agency itself uses ATI as part of verifying railroad compliance with track safety standards. These early experiences with automated track inspection, in which ATI augments manual visual inspections by track inspectors long required by FRA rules, have yielded very positive safety results. Unfortunately, FRA’s recent actions to deny approval of automated track inspection by rail carriers call into question the Biden administration’s commitment to rail safety.

In November 2018, FRA approved BNSF’s test program to evaluate automated track geometry cars that could replace some visual track inspections as well as augment the remaining visual inspections through data-driven selections of track segments in need of closer monitoring. BNSF found during its ATI pilot program that its automated geometry cars not only identified many defects that went undetected by visual inspections but also allowed for the redeployment of manual track inspectors to segments with greater known needs. As a result, its track inspectors on the pilot territory were “recording nearly three times the number of geometry defects per 100 miles than were identified by track inspectors systemwide.”

BNSF also found safety benefits arising from reduced track occupancy by inspectors, which reduces their exposure to hazards in the field. Its pilot program saw 20% reductions in both the number of requests to occupy track and the number of hours the track was occupied for inspections. In addition, BNSF believes increasing automation will lead to reductions in rail equipment accidents that may arise from track defects and human factors. These findings were unambiguously positive and accepted by FRA.

In July 2020, BNSF petitioned FRA for a system-wide waiver to build on this success. In January 2021, FRA authorized BNSF to supplement visual track inspections with automated geometry inspection over two territories of track—the Powder River Division, centered around Wyoming’s coal country, the site of BNSF’s earlier pilot program; and the Southern Transcon route from Los Angeles to Chicago—rather than system-wide as the railroad had requested. BNSF’s request for a seven-year waiver was also denied, with the board limiting this waiver to the standard five years.

In June 2021, BNSF again petitioned FRA to expand the geographic scope of its waiver to include the Northern Transcon route from Seattle to Chicago and an additional 395 miles of track to the existing Power River Division ATI territory, subject to the same conditions and limitations imposed by the January 2021 waiver. While it waited, BNSF sent multiple letters to FRA asking for a decision.

Finally, in March 2022, FRA responded by denying BNSF’s petition. FRA’s rationale for its decision is peculiar for a safety regulator. The agency did not deny the safety benefits of ATI that it has documented and praised in the past. Rather, it stated it had collected enough data from BNSF for its ongoing ATI evaluation, arguing that allowing BNSF to expand its successful use of ATI would amount to “short-circuiting this evaluation process.”

This doesn’t pass the laugh test. Allowing BNSF to expand its ATI program would have no impact on FRA’s ATI evaluation. The agency itself says it already possesses data necessary to carry out this task, and granting BNSF’s modest expansion request could not impact a historical dataset and certainly not “short-circuit” a program evaluation that makes use of those data. Nothing in law justifies FRA’s choice to deny a waiver for the safety-enhancing activities of one railroad as it evaluates potential industry-wide regulatory changes. Interestingly, the only known ATI data quality problem is with FRA’s own internal ATI program, which was the subject of an audit report by the Department of Transportation’s Inspector General that was publicly released shortly after BNSF filed suit. It found, among other things, that over half of FRA’s ATI-related inspection reports reviewed by the Inspector General contained inaccurate data.

In its letter denying BNSF’s petition, FRA notes that the only opposition it received came from the Brotherhood of Maintenance of Way Employees Division (BMWED) of the Teamsters Union. In its denial, FRA quotes BMWED’s opposing comment to BNSF’s petition that the union “‘does not feel’ that any of the test programs or waivers issued related to railroads’ Automatic Track Geometry Measurement Systems programs provide a ‘level of safety equal to the minimum safety requirements’ of FRA’s Track Safety Standards.”

Under Biden-appointed FRA Administrator Amit Bose, are the feelings of a self-interested railroad union being elevated over railroad safety? One would hope not, but it’s possible to see how one would get that impression. It is no wonder BNSF filed its petition for review with the U.S. Court of Appeals for the Fifth Circuit, seeking to overturn FRA’s decision “on the grounds that FRA’s action is arbitrary, capricious, an abuse of discretion, and otherwise contrary to law, all in violation of the Administrative Procedure Act.”

BNSF may not be the only railroad with grounds to challenge FRA’s conduct around ATI. Norfolk Southern Railway also had its waiver petition denied by FRA in March using nearly identical language, including citing the BMWED union’s “feel[ings]” in support of its decision. As with BNSF, the only opposition to Norfolk Southern’s ATI waiver petition came from BMWED. Something fishy is going on at FRA. In addition to review by the courts, Congress and the Department of Transportation Inspector General should probe these recent automated track inspection decisions.

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Why Free Transit Is Not Green
By Baruch Feigenbaum

During the last five years, a growing number of cities from Kansas City, MO, to Olympia, WA, have started offering free (no-fare) transit service. Many transit advocates have claimed that fare-free transit will reduce greenhouse gases. In the last few months, the Massachusetts Budget and Policy Center, Rapid Transition Alliance, and the Climate Mobilization Project have each argued that free public transit would result in a major reduction in greenhouse gas (GHG) emissions.

But just because something sounds logical doesn’t mean it is true. David Zipper, visiting fellow at the Harvard Kennedy School’s Taubman Center for State and Local Government, conducted detailed research for a recent Bloomberg article, and found that free transit actually increases emissions. How did Zipper reach his conclusion?

First, let’s examine what transit advocates claimed. In the Massachusetts Budget and Policy Center article, analyst Phineas Baxandal notes that in 2017 transportation (of all types) accounts for 42% of greenhouse emissions in the state. He notes also that bus riders are sensitive to costs and details an MIT experiment with low-income individuals who ride the Massachusetts Bay Transportation Authority (MBTA) transit system. Half of the riders’ fares were reduced by 50%; the other served as a control group and paid full fare. The riders with reduced fares took 30% more transit trips. He notes that customers can board a bus faster if they don’t have to pay fares. He speculates that eliminating fares would encourage people not to own vehicles so they would choose to live closer to where they work, reducing GHGs. Further, fare-free transit can encourage compact land-use patterns, which would reduce GHGs, he suggests.

The Rapid Transit Alliance is ready to battle with automobiles, saying, “Free mobility, it seems, is the perfect antidote to rising car militancy in our cities and towns around the world – especially as countries reopen and rebuild after the pandemic.” The piece notes in the city of Tallinn, Estonia’s transit usage increased 14% after free service began.

The Climate Mobilization Project findings argue that eliminating fares on buses must be part of a goal to cut 60% of carbon emissions and write, “Data collected in 2019 and 2020 demonstrated a 50% increase in ridership after introducing the fare-free model.”

What free transit advocates show is that reducing the price of transit increases transit ridership. That’s Economics 101. We see the same effect with the cost of fuel. When the price of fuel increases, the number of miles that are driven decreases.

But, as Zipper notes in Bloomberg, to reduce carbon emissions, free transit policies must induce transit-choice riders to drive less. Zipper writes:

Providing enhanced mobility for those of limited means is societally valuable — but it doesn’t reduce emissions. To accomplish that, fare-free transit must win over a significant number of people who would otherwise have driven. And that’s a trickier proposition. Car owners tend to be wealthier than the general public, and their access to a private vehicle makes them less willing to tolerate bus transfers, wait times, or slow journeys. Especially in a region lacking frequent and fast bus service (UTA buses arrive every 15 minutes on many routes), removing a $2.50 fare seems unlikely to convince many drivers to leave their keys at home.

What did researchers find in the link between free transit and automobile usage? Zipper compiles evidence from across the globe. Remember The Rapid Transit Alliance’s claim that free transit in Estonia was reducing greenhouse gas emissions? Estonia’s National Auditor analyzed mode changes and found free transit failed to reduce car trips. Mohamad Mezghani, secretary general of the International Association of Public Transport, wrote a policy brief on free transit in Europe and found that in Dunkirk, France, and Frydek-Mistek, Czech Republic, most of the new public transit riders used to walk.

Did free transit reduce driving in Latin America? Chilean researchers gave free, two-week transit passes to residents. The residents did use transit 12% more, but they did not drive any less, Zipper reports.

Have U.S. cities fared any differently? A 2012 study by the National Academy of Sciences found fare-free transit experiments in Denver and Austin failed to reduce driving.

In fact, as Zipper highlights, many respected transit advocates have a negative view of free transit. David Bragdon who leads Transit Center notes that the way to improve transit is not to remove the fares but to make transit more abundant and frequent. “If you take bad American transit that costs $1.50 and make that bad service free, that won’t move the needle enough to make a climate impact,” Bragdon tells Zipper.

What does all of this mean from a public policy perspective?

Many anti-highway groups believe that if they can combine transit, cycling, walking, labor, environmental, and low-income interest groups together and throw a solution that pleases everybody at a wall, it will stick and the groups will then be in a stronger position to battle highway interests. But there are several problems with this approach, including that these groups’ members may have very different interests.

By partnering with environmental interest groups, for example, mass transit agencies may be neglecting their most-important customers—transit-dependent riders. Free transit increases ridership, but so does more frequent service, redesigning bus route networks, and providing cleaner vehicles.

The best way to improve transit service for transit-dependent individuals is not by making it free for everybody, but by providing vouchers to the lowest income individuals who can use it for any mobility option. If transit riders are empowered to take the voucher to any mobility provider, they are more likely to receive quality service. If transit agencies really want to serve their communities, they will make service quality a higher priority.

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News Notes

Georgia DOT Plans a “Pipeline” of P3 Projects
To continue building out what will be a network of variably priced express lanes in the Atlanta metro area, Georgia DOT is under way on the first of three multi-billion-dollar public-private partnership projects. For the first time, it plans to procure all three as revenue-risk design build finance operate maintain (DBFOM) concessions. The request for qualifications for the first of these—SR 400 express toll lanes—went out March 31, with qualifications due June 23. This first project is expected to cost $2.0 to $2.4 billion, and GDOT expects to offer a 50-year concession to the winning team. The other two projects will be I-285 Express East and I-285 Express West. Public Works Financing expects that this pipeline of express lanes megaprojects will ensure strong industry interest. It’s the first such multi-project P3 pipeline in the country.

Political Battle Over New Mississippi River Bridge at Baton Rouge
Louisiana Gov. John Bel Edwards started the debate earlier this year by proposing that the state set aside $500 million of what is expected to be $3 billion in unanticipated revenue as a down payment on the planned $2.5 billion new bridge across the Mississippi in or near Baton Rouge. But last month some legislators proposed dividing that $500 million among an array of projects. Louisiana DOT Director Shawn Wilson favors a long-term P3 procurement, with tolls as a revenue stream, but understands that in a state with very little tolling, having the state put in some equity (e.g., 20%) would contribute to a financing package leading to toll rates that are not sky-high (which would risk dooming the project).

California Aiming for 35% of Car Sales by 2026 as Electric Vehicles
The California Air Resources Board has proposed that all new vehicles sold in the state by 2035 be either hybrids or fully electric, with an interim target of 35% in 2026, just four years from now. Currently, 16 other states follow California’s lead on vehicle emissions and zero-emission regulations, but it’s not clear that many or all of them would go along with what many consider an unrealistic schedule.

Ownership Change for Canada’s Confederation Bridge
Canada’s first major DBFOM P3 was used to finance, build, and operate the eight-mile Confederation Bridge, which links New Brunswick and Prince Edward Island, across often-icy waters. It cost C$1.3 billion and opened in 1997. The main equity providers in the P3 consortium were Canadian pension fund OMERS and French infrastructure firm Vinci. Last month OMERS agreed to sell 100% of its interest in the P3 company to Vinci Highways. Thanks to this transaction, Vinci will now own 85% of the concession, which runs until 2032.

Macquarie Seeks to Diversify U.S. Infrastructure Holdings
Financial investors such as Macquarie tend to be medium-term investors, and last month brought news of two potential sales by this major investor. First, Macquarie Asset Management announced it is looking to sell its 90% equity interest in the replacement Goethals Bridge linking New Jersey with Staten Island. That new bridge opened in 2018, moving from the risky construction phase to the less-risky operations phase. Several weeks later, Macquarie Capital announced plans to sell a portion of its equity in Accelerate Maryland Partners, the P3 team that won the bidding for a predevelopment agreement for Maryland’s new American Legion Bridge and I-495/I-270 express toll lanes project. The fraction it is seeking to sell was not disclosed, but a Bloomberg story estimated that it might total $1.25 billion.

Philippines’ Longest Bridge Opens
On April 27, the new 5.5-mile Cebu-Cordova Expressway bridge opened to traffic. The $627 million project was procured as a long-term P3 led by a special-purpose vehicle managed by Metro Pacific Tollways Development Corp. The company made a point of noting at the opening festivities that it was “funded entirely with private money, with no public funds.” The bridge is a key link in the expressway, another 3 to 5 miles of which are still to be built.

Jacksonville Express Lanes Open, but Only Part-Time
The second set of express toll lanes (ETLs) in Jacksonville, Florida opened to traffic in early April. The new variably priced lanes are on the East Beltway. Florida DOT announced that variable prices will be charged only during peak periods, 6 to 10 AM and 3 to 7 PM Monday through Friday. This contrasts with the operating policy of ETLs financed by toll revenues, whether managed by P3 companies or government agencies. Those ETLs generally charge prices 24/7, and the data show that some customers value driving in those lanes even when the general-purpose lanes are not congested. With all-electronic toll collection, there is no significant increase in operating cost from 24/7 operation. Those ETL operators wonder why others would leave money on the table by not charging for use all the time.

Jamaica Planning Tourism Highway Expansion
The International Finance Corporation has signed a contract with the government of Jamaica to develop a plan for a P3 procurement to widen about 37 miles of two-lane highway to four lanes. The three segments to be expanded are on the North Coast Corridor where major tourist resorts are located in Montego Bay and Ocho Rios. Jamaica has a toll road across the mountains between Montego Bay and the capital, Kingston, on the south coast. It is not clear whether tolling will be part of the North Coast improvements.

Panama Canal to Increase Toll Rates to Fund Improvements
The Panama Canal Authority is facing a water supply crisis and has planned $2 billion worth of water supply projects, with assistance from the U.S. Army Corps of Engineers. To help pay for these needed improvements, it is planning refinements to its tolls. For example, it plans to simplify its complex toll rate structure from 430 different tolls to fewer than 60. For the first time, a ship hauling empty containers back to Asia will now be charged tolls, having historically been exempt for some reason. We can only hope the Army Corps will bring some of this knowledge back to the USA, suggesting how toll revenue could jump-start the huge backlog of lock and dam modernization projects on the inland waterway system.

Will Including Light Rail Once Again Kill the Oregon/Washington I-5 Bridge Replacement?
Staffers working to define the long-needed replacement I-5 bridge between Portland, OR and Vancouver, WA are finalizing recommendations to go before various officials this month—including a light rail line. While federal regulations appear to require a transit option on the bridge, Portland’s demand that this be an extension of its MAX light rail system added over a billion dollars to the proposed cost of a previous attempt to finalize a bridge plan, ultimately killing it. Portland has bus rapid transit lines which could operate on uncongested express toll lanes on the new bridge; that approach would not require a dedicated lane each way and the addition of more expensive structure.

California Port Congestion Could Get Much Worse Next Year
About a decade ago the California Air Resources Board implemented a ban on the use of all trucks powered by 2006 and older emissions-spec engines, as of Jan. 1, 2023. Now CARB plans to go further, extending the ban to 2007-2009 engines used by many drayage trucks that serve the ports. An analysis of vehicle records by RigDig Business Intelligence estimated that nearly 76,000 trucks of 2007-2009 vintage are in operation in the state. Those trucks will be blocked from having their registrations renewed in January, after which they will be illegal to operate on California roads. Needless to say, many trucking industry people are strongly opposed to this policy.

Sovereign Wealth Fund to Invest $2.7 Billion in Indonesia Toll Roads
On April 14, the Indonesia Investment Authority signed agreements to invest a total of $2.7 billion in the Trans Sumatra Toll Road and the Trans Java Toll Road. Sovereign wealth funds such as INA in recent years have begun investing in major infrastructure projects that generate user fee revenue. They join with public pension funds and major insurance companies in finding such projects compatible with their need to generate steady or growing revenues over long periods of time.

Gas Tax Holidays May Not Save Consumers Very Much
A detailed analysis of the impact on gasoline purchasers of changes in gas tax rates found very little difference, whether gas taxes went up or down. The study was carried out by the American Road & Transportation Builders Association (ARTBA) and the Transportation Investment Advocacy Center (TIAC). On average, only 18% of an increase or decrease in the state gas tax rate was passed through to consumers in the two weeks after such a change took place. The study reviewed 177 changes in state gas tax rates in 34 states between 2013 and 2021.

I-27 Designated in Texas
The recent $1.5 trillion federal appropriations law included an official designation of a new Interstate corridor, I-27, from the Texas/Mexico border to the border with New Mexico. TxDOT’s plan is to upgrade existing highways, such as US 83, US 87, and US 277 for most of the north-south route. The 963-mile corridor has an estimated cost of $23.5 billion, as of 2020. It would begin at Laredo, TX and cross the northern border at Raton, NM.

TollPlus Acquired by Vinci Highways
Vinci Highways, a subsidiary of French infrastructure firm Vinci Concessions, has acquired the 70% of TollPlus it did not already own, reported ITS International last month. TollPlus is a toll back-office systems specialist. Together, the firms have been developing free-flow tolling operations.

New Federal Data Reveal Condition of U.S. Highways and Transit
At increasingly lengthy intervals, U.S. DOT produces a comprehensive assessment of the conditions and performance of U.S. highways and transit infrastructure. It’s several hundred pages of detail, and I doubt if anyone in Congress actually reads it (though I always do). To the rescue comes The Road Information Program (TRIP) which has released an excellent short report drawn from the 2021 federal C&P Report and other sources. “Funding America’s Transportation System” provides a wealth of information in less than a dozen pages, plus a data-rich appendix.

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Quotable Quotes

“[E]ven before the rise of remote work, notes MIT’s Alan Berger, suburban GHG emissions for individuals were found to be similar to GHG amounts for those living in the inner city, challenging a widely held assumption that living in the urban center is better for sustainability. Changes in technology, such as innovative materials and sophisticated systems for controlling energy and water use, could make these new communities even more environmentally sustainable.”
—Joel Kotkin, “Exurbia Rising,” American Affairs, Feb. 20, 2022

“When the IIJA was being debated in Congress, the fact that it was providing a massive, one-time infusion of capital funding to build down Amtrak’s long-term capital backlog ($22 billion over five years) was well-known. And the $36 billion for new intercity passenger rail capacity grants (many of which will be in partnership with Amtrak) and the $5 billion for “megaprojects” (which might also be used for Amtrak-related capital) were also major selling points for the IIJA. But the fact that the IIJA was de-emphasizing the minimization of federal operating subsidies as an Amtrak goal was not widely advertised (despite being clearly present . . . ). And if Senators knew that Amtrak was going to use the new language to justify abandoning any hope of future subsidy reduction and instead return to the perpetual ward-of-the-state, federally subsidized operating losses of $1 billion per year, they didn’t mention it during debate prior to passage of the bill. And it should be noted that the IIJA did not actually provide any money to pay for the perpetual operating losses that it implicitly authorized Amtrak to incur—all of the IIJA funding, by law, can only go to capital projects.”
—Jeff Davis, “Amtrak Concedes Perpetual $1 Billion/Year Operating Losses,” Eno Transportation Weekly, April 21, 2022

“Today the Biden Administration doubled down on discouraging states from building new roads they may need, despite this policy being in direct conflict with what Congress intended in the recent infrastructure law. Instead of heeding Republicans’ calls for the Federal Highway Administration to rescind its December guidance, which they know is causing confusion among states, today’s announcement echoes the Administration’s earlier guidance and blatant misapplication of the IIJA. The FHWA, Department of Transportation, and Biden Administration need to stop prioritizing their woke agenda over implementation of the infrastructure law as it was written.”
—Rep. Sam Graves (R-MO) and Rep. Rodney Davis (R-IL), “Graves and Davis Statement on the Biden Administration’s Latest Policy Discouraging States from Using their Infrastructure Funds to Build Roads,” April 21, 2022

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The post Surface Transportation News: Anti-highway rhetoric, electricity on highways, and more appeared first on Reason Foundation.

• Pandemic, migration patterns changing U.S. transportation
• Convert freeways to boulevards or deck them over?
• How not to introduce road user charges
• Puerto Rico considering more toll road leases
• Could automation replace most long-haul truck drivers?
• Let’s emulate Canada on commercial rest areas
• News Notes
• Quotable Quotes

Transportation Planners Need to Adapt to Changes in Remote Work, Migration

It’s still something of a cliché to say that the COVID-19 pandemic has changed America, especially via the large increase in remote work. Several recent reports provide facts and figures on these ongoing changes, and transportation planners and funders in state legislatures, Congress, and elsewhere need to increasingly take the transportation implications into account.

Let’s start with a study by Adam Ozimek of Upwork, released in March. The new survey of 23,000 respondents found that remote work is still a significant factor in people’s decisions about where to live and work. It found that 2.4% of those surveyed have moved because of remote work since 2020. And 9.3% said they are “planning on moving because of remote work,” compared with only 6.1% saying that in Upwork’s first survey during the pandemic, in Oct. 2020. Significantly, 28% of those who say they are planning to move would be four hours away from where they live now, and another 13% said they will move two-to-four hours away from where they live now.

These potential moves reflect the ideas of hybrid and remote work embraced by many employers, with employees splitting their time between home and workplace. This leads to a kind of “donut effect” in which the catchment area for an employer spreads widely. For example, using a housing prices map centered on New York City, the donut may include the Poconos, Allentown (PA), and southern New Jersey—places far beyond the metro area (and outside the territory of its metropolitan planning organizations MPOs).

A detailed article, “Internal Migration: Movers and Shakers,” in The Economist also discussed these trends and the potential impacts on the economies of major cities. It quoted Harvard economist Edward Glaeser cautioning city leaders about “the completely understandable urge for progressive action in cities running into the buzz-saw of heightened geographic mobility,” but warning that if they increase taxes on business and the rich “and fail to offer basic services like public safety, then something that was a modest economic disruption could turn into something much more severe.”

It also quoted Chapman University’s Joel Kotkin saying, “People go where they can achieve the American dream. It’s increasingly difficult to do that in the cities that created the American dream, like New York,” because of their high cost of living.

Demographer Wendell Cox has a new report out, reporting on census data on population changes for the 15 months ending July 1, 2021. While there was a record low amount of population increase, there was a “perhaps unprecedented rise in net domestic migration,” Cox writes, accelerated by the increase in remote work. Metro areas above one million people with the largest one-year population gains topped out with Austin at 3%, followed by Raleigh, Phoenix, and Jacksonville. Those with the largest population losses were San Francisco (-2.6%) followed by San Jose, New York, and Los Angeles.

Putting these pieces together, Kotkin has published a long article called “Exurbia Rising.” Even before the COVID-19 pandemic, there was already significant migration from older, high-cost-of-living cities to urban counties in states such as Florida, Georgia, and Texas. Those making such moves were “young people in prime family formation years.” The suburban and exurban counties experiencing the highest growth had 3.5 times as many children per household as in places like Manhattan and San Francisco. As one major home builder, Robert Schottenstein, CEO of M/I Homes, told Kotkin, “This is a flight to safety and security. The millennials are getting older, and they are transitioning as they start families.”

Some of the original exurbs have turned into suburbs, as population growth spreads outward. Kotkin cites places such as Irvine, CA, and The Woodlands near Houston as examples. More recently, such planned communities farther from major metro areas include Summerlin, NV, Tres Lagos, TX, and New Albany, OH. Contrary to the stereotype of lily-white suburbs, Irvine is 40% Asian, The Woodlands is 30% non-white, and Tres Lagos is 75% middle-class Hispanics. New Albany, over the past 20 years, has grown from 3,700 to 10,000 and has 15,000 employees in its business park—prior to the opening of Intel’s planned $20 billion chip manufacturing project.

The key to housing affordability, says Kotkin, is taking advantage of lower-cost land on the fringes of metro areas—the exurbs. And contrary to the notion that the need to create services like roads, water, and sewers makes housing there more costly than infill development, utility needs are largely being met by cost-effective municipal utility districts (MUDs), of which Texas has more than 900 and Colorado more than 1,800.

Current federal, and some state, transportation planning ignores these developments and trends. Rather than figuring out the transportation needs of increasingly decentralized urban/suburban/exurban metro areas, many transportation planners and the U.S. Department of Transportation continue to focus a lot of efforts on getting Americans out of their cars and into high-density housing that can be served by transit. The metro areas where transit works relatively well are those that still have large job centers downtown—mostly legacy transit cities such as New York, Chicago, Boston, Philadelphia, and San Francisco. But planners’ focus on density and transit ignores the suburbanization and exurbanization that has been accelerated by the pandemic and the rise of remote work.

Kotkin suggests that a major change is long overdue. Congress and many MPOs that continue to expand funding for rail transit projects and attempt to restrict housing developments at the urban fringe ignore this country’s rapidly changing geography. He notes that a study of 23 completed rail transit systems found that in those locales, “the percentage of commuters driving alone has increased…and even in the largest metropolitan areas, the average transit commute takes about 75 percent longer than the average auto commute.”

Moreover, as access studies from the University of Minnesota have documented, in metro areas with more than one million people, “cars can reach almost 55 times as many potential jobs as transit in less than 30 minutes,” Kotkin writes.

We need transportation policies that match our evolving urban/suburban/exurban geography. Rail transit and forced densification are not the answer.

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Convert Freeways to Boulevards or Deck Them Over?

In its proposed American Jobs Plan, the Biden administration included a $15 billion program to “reconnect neighborhoods” that had been divided when the original urban freeways were built in the 1960s. In enacting the bipartisan infrastructure law, the Infrastructure Investment and Jobs Act, Congress cut back that funding to $1 billion over five years, split into 25% for planning and 75% for capital spending. Those metro areas with potential candidates for this program face a major decision. If the freeway in question is not a vital link in long-standing travel flows, replacing it with an at-grade boulevard may be desirable, though the cost of tearing out the freeway and building the boulevard may be daunting. But if the freeway is serving as a critical link in the transportation system that serves, cars, buses, and trucks, decking over the freeway may be far wiser and less costly, assuming the freeway section in question is already below grade.

In Chapter 10 of my book, Rethinking America’s Highways, I summarize several cases of freeway teardowns, which have mostly occurred in places where the removed freeway was a never-completed stub rather than an important network link. I also discuss a growing number of cases where portions of urban freeways have been decked over—in metro areas such as Dallas (Woodall Rogers Freeway), Denver (under way on I-70), Phoenix (I-10), and Seattle (I-5 and I-90), as well as a major project in Hamburg, Germany. Decks are far less costly than tunnels such as the Big Dig in Boston and the Alaskan Way Viaduct in Seattle (though tunnels, financed via toll revenues) may be a solution where the existing freeway is above-grade)

Two economists at the Federal Reserve Bank of Philadelphia, Jeffrey Brinkman and Jeffrey Lin, released a cost-benefit analysis of “burying” an urban freeway rather than converting it into a boulevard. They recognize the economic value of freeways that are key links in metro-area mobility and factor that into their analysis, “The Costs and Benefits of Fixing Downtown Freeways.”  They understand that the amenities for freeway users are dis-amenities for those in adjacent neighborhoods, and show that urban population declines are greatest in Census tracts nearest to freeways. Freeway access is a benefit to suburban commuters going downtown but does not help most near-downtown workers get to their jobs.

Drawing on some urban economic models that separately assess people’s value of job access and the quality of life benefits of neighborhoods, they model a hypothetical project that would deck over a 4.5-mile stretch of I-95 in Philadelphia, along the riverfront. In passing, they note that portions of Philadelphia’s I-676 and a portion of I-95 have already been decked over, creating parks and reconnecting divided communities. They then model the estimated amenities and productivity of neighborhoods affected by the potential project, with the assumption that the transportation benefits of I-95 would remain the same as before it is decked over. Their model predicts that the population near the freeway would increase dramatically along with modest increases in land values. They estimate that the net present value of lifetime benefits (using a 7% discount rate) would be around $3.5 billion.

They also estimate the project’s cost, at $500 million per mile (no source given), at around $2.25 billion. Obviously, the actual cost would depend on the specifics of the freeway in question, but this is an encouraging preliminary finding that decking over a depressed freeway may well have real economic benefits exceeding its costs. That would be a win-win solution, for at least certain kinds of downtown freeways.

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An Example of How Not to Introduce Road User Charges

Dating all the way back to the National Surface Transportation Infrastructure Financing Commission’s landmark 2009 report, Paying Our Way, the widely-accepted solution for the long-term decline of fuel tax revenue is to replace the fuel tax with some kind of per-mile charge. With ever-increasing federal miles per gallon (mpg) fuel efficiency requirements for new vehicles, plus federal government and auto company plans to phase in electric vehicles and phase out internal combustion vehicles, charging per mile will be sustainable long-term no matter what means of vehicle propulsion evolve.

To date, just about every pilot project to test mileage-based user fees (MBUFs)—or road user charges (RUCs) as they are known in the west—has stressed to participants that what was being simulated was the replacement of the gas tax, not some new charge in addition to it. Many of the pilot project participants were skeptical prior to taking part, fearing that the mileage-based user fees would be “yet another tax increase on driving.” But by the conclusion of the project, they understood, having seen monthly reports on what they were paying via their current state fuel tax compared with the hypothetical MBUF had it been real.

All this is by way of context for a recent Time article, titled “This California City’s Attempt to Charge People for Driving Back-Fired. Here’s Why That Matters for Everyone.” Although the article zeroed in on the city of La Mesa, the focus of the piece was the San Diego Association of Governments (SANDAG), the metropolitan planning organization for the San Diego metro area. SANDAG’s new long-range plan calls for implementing a road user charge in 2030, to help pay for the projects in its $160 billion regional long-range transportation plan. The RUC would be charged in addition to the current state and federal gas tax, not as a replacement. So it would, indeed, be “yet another tax on driving,” as charged by conservative Republican activist Carl DeMaio, who is quoted in the Time article.

DeMaio and his allies have made opposition to the mileage tax a key point in opposing city officials up for re-election if their city has signed on to the SANDAG plan. The article recounts DeMaio-led anti-mileage-tax town halls and the political pressures that have led a number of city officials to reverse their previous support for the mileage tax. Time reporter Justin Worland wrote that “SANDAG expects [the mileage tax] to raise $14 billion in revenue over two decades, which would help underwrite new trolley lines, more efficient highway lanes, and rideshare programs.” In the majority of states, including California, gas taxes can only be spent on roadways, consistent with the users-pay/users benefit principle. Clearly, what SANDAG has proposed is not only an add-on; it is clearly an overall transportation tax, but the tax would be paid only by roadway users. Thus, rather than having a debate about why road user charges are a better, more sustainable option than gas taxes, SANDAG is left trying to explain additional taxes.

Here I must confess that I’ve had a minor role in the evolution of the SANDAG plan. Early last year I accepted an invitation (along with Prof. Michael Manville of UCLA and Brianne Eby of the Eno Center for Transportation) to take part, as subject-matter experts, in a Zoom meeting with the SANDAG board. My talking points for that session were:

• Express toll lanes control congestion and can generate revenue;
• All lanes of a congested Interstate can be (legally) tolled to manage congestion;
• Transportation equity is very complicated; and,
• We need to replace per-gallon fuel taxes with per-mile charges.

Several months later, SANDAG’s chief planning officer emailed to invite me to discuss with senior staff “the political calculus of congestion pricing.” saying they were impressed with the points in my Reason paper, “A Conservative Case for Highway Tolling.” I accepted and did so on June 10. I don’t have notes on what I said then, but it was likely along the lines of the above talking points. Evidently, I failed to stress strongly enough the need to ensure that a road user charge should be a replacement for the fuel tax, not an addition to it—and now SANDAG is facing a major political blowback.

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Puerto Rico Considering More Toll-Road P3 Leases

Puerto Rico gets little respect as a public-policy pioneer. Yet it is one of the few U.S. jurisdictions that has a dedicated public-private partnership unit as part of its government (Puerto Rico Public-Private Partnership Authority—P3A). And it has pioneered some notable transportation P3 projects:

• One of the first U.S. revenue-risk P3 toll projects, the Teodoro Moscoso Bridge in San Juan;
• The P3 leases of two of its toll roads, PR-5 and PR 22; and,
• The P3 lease of the formerly stodgy San Juan International Airport, converting it into a world-class airport.

The P3A recently asked for comments on its “Desirability and Convenience Study” on the possible P3 lease of some or all of its other (non-P3) toll roads: PR-20, PR-52, PR-53, and PR 66. What apparently motivated the study was “deterioration and a lack of adequate maintenance” of those four toll roads combined with the large debt ($5.8 billion) of the Puerto Rico Highways and Transportation Authority (PRHTA), of which $1 billion is associated with those toll roads. That would make it difficult for PRHTA to finance major upgrades of those toll roads, especially given Puerto Rico’s overall debt burden—it is in the process of emerging from a de-facto bankruptcy overseen by a congressionally authorized restructuring commission.

Besides retaining the status quo, the study offered three options: an availability-payment (AP) concession for the four toll roads, a revenue-risk P3 concession for only PR-52, and a similar concession for all four toll roads. The study favored the last option, on the presumption that this would be large enough to generate an up-front concession payment that could be used to reduce some of PRHTA’s current debt. That was the model used for the successful P3 lease of the San Juan Airport. However, the projected revenue from the airport (fueled by tourism) may be more robust than the projected revenue from the toll roads (driven mostly by locals).

So-called “brownfield” leases of existing revenue-generating infrastructure have been used widely overseas, but on only a limited basis in the United States. The two best-known in transportation are the long-term P3 leases of the Chicago Skyway and the Indiana Toll Road, both of which generated large up-front payments due to robust projected revenues and no major near-term capital improvement needs. Other brownfield toll road P3s offered riskier revenue projections, including the Northwest Parkway in Colorado and the Pocahontas Parkway in Virginia; to the best of my knowledge, neither involved a significant up-front payment.

Puerto Rico’s existing P3 toll roads are being well-run by their private-sector partner (Abertis and Ullico). The P3 entity added reversible Dynamic Toll Lanes to PR-22—the world’s first variably-priced lanes added to an existing toll road. This performance evidentially has given the P3A confidence that further toll road P3 leases would be good public policy. Comments on the study are due by April 25th.

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Could Automation Replace Most Long-Haul Truck Drivers?
By Marc Scribner

In March, the journal Humanities and Social Sciences Communications published a new study by researchers from Carnegie Mellon University and the University of Michigan finding that “up to 94% of long haul trucking operator-hours may be impacted” by automation (Mohan and Vaishnav, “Impact of automation on long haul trucking operator-hours in the United States”). This headline finding may understandably alarm owner-operators and truck driver unions, but the authors note that this scenario could only occur in the future when automated vehicle (AV) technology advances to a point well beyond near-term capabilities. As it stands, policymakers should prioritize safety considerations of AV technology over highly speculative future workforce impacts.

The Mohan and Vaishnav study examines the truck driver workforce implications of the “transfer-hub” model of long-haul automated trucking. This entails truck trips being split into urban and highway legs. The automated tractor would drive the rural highway miles between urban transfer hubs. At the transfer hubs, trailers would be switched between automated and human-driven tractors. Human-driven tractors would bring trailers from an urban origin to a transfer hub and from the transfer hub to the destination.

Their model found that 94% of operator-hours are at risk of replacement by automated driving if AV technology is deployed everywhere in the continental U.S. in all weather conditions. But current AV technology isn’t capable of operating everywhere in all types of weather that can currently be driven by human operators. Recognizing these limitations, Mohan and Vaishnav then develop three additional scenarios to apply constraints on operation that are relaxed to progressively build to higher operating levels and workforce impacts.

First, they consider automated operations restricted to eleven southern sun-belt states. Most heavy-duty AV testing currently takes place in these states primarily because they are unlikely to encounter snow and ice that current generation AV technology cannot handle. They estimate that this scenario would impact only 10% of operator-hours.

Second, they consider automated operations restricted to spring and summer months across all states. They are able to exploit the Census Bureau’s Commodity Flow Survey dataset, which lists the financial quarters of shipments in the sample, to focus on trips that would take place in warmer weather. They estimate that this scenario would impact an additional 43% of operator-hours, for a cumulative total of 53% of operator-hours impacted by truck automation.

Third, they consider automated operations for trips of at least 500 miles. They selected this minimum trip distance due to potential interactions with federal hours-of-service regulations that may complicate the economic case for automating shorter long-haul trips in a transfer-hub model, and posited that truck drivers could generally complete 500-mile trips in a single day without stopping. They estimated that this scenario would impact an additional 33% of operator-hours, for a cumulative total of 86% of operator-hours impacted by truck automation.

Hence, relaxing the third and final constraint to allow for the operation of long-haul AV trucks everywhere in all conditions adds just 8% of operator-hours in Mohan and Vaishnav’s model to reach that 94% headline figure. This has a couple of implications.

First, achieving automated driving capabilities necessary to automate anything close to 94% of long-haul operator-hours is likely many years off. The technology has not reached the point where all highway miles in all weather conditions can be automated. Even when the technology is capable of handling snowy Midwestern highways, it is likely to be deployed at the speed of fleet turnover—so, a phase-in of a decade or more can be anticipated. At this pace, truck driver displacement may not be much more rapid than attrition through retirement in a workforce that skews middle-aged.

Second, sizeable workforce impacts could be felt before full deployment of automated trucks everywhere and anytime. If Mohan and Vaishnav’s model is a rough approximation of a future AV truck phase-in, there could be many opportunities to automate highway miles in weather free of snow and ice that is easier to automate. They estimated that approximately half of operator-hours could be automated in the warmer months between April 1 and October 1 across the entire continental U.S. The scale of such an impact would reshape the trucking industry well before automated capabilities approach that 94% headline figure.

However, despite the recent announcements made by automated truck developers such as TuSimple and Locomation that they are expanding their on-road testing, automated trucking remains in its infancy and will not transform the trucking industry in the short run. Discussions on eventual workforce impacts have already begun (the AV industry has formed the Partnership for Transportation Innovation and Opportunity in response), but these future impacts are extremely uncertain, and public policy is a blunt tool at best. Until automated trucking operations expand beyond limited test cases, policymakers should remain laser-focused on harnessing the road safety promise of AVs rather than speculating on potential job losses that might occur decades from now.

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Let’s Emulate Canada on Commercial Rest Areas
By Baruch Feigenbaum

The COVID-19 pandemic has illustrated the importance of trucking to the American economy. Hospitals needed medical supplies and students taking classes from home needed computers transported by trucks, for example. The supply chain crisis has reminded us that driving a tractor-trailer is a challenging job. Long-haul trucking has a near 100% annual turnover rate, among the highest for any profession.

The American Transportation Research Institute, the trucking industry’s research arm, conducted a study and found that truck drivers’ two biggest needs today are ample parking spaces and healthy and quick food options.

A lack of parking is the biggest problem. Some drivers stop driving earlier in the day—before they reach their hours-of-service limit because finding parking spots between 4 p.m. and 5 a.m. can be extremely challenging in many areas of the country. If more parking spaces were available, some truckers could drive an additional 100 miles per day. Thus, the current lack of truck parking hinders our supply chain, raising prices and reducing economic activity.

Truck drivers are also looking for healthier food, which can be sparse at many truck stops. Specifically, truck drivers say they are looking for fresh salads and fresh fruit. And most drivers do not have the luxury of sitting down for a meal at a restaurant or finding a place to park so they can shop at a grocery store every night.

Thankfully, one government has created a plan to solve these issues. But it is not in the United States; it’s the province of Alberta, Canada. With its commercial rest areas proposal, Alberta plans to issue a request for proposals to rebuild as many as 18 highway rest areas on level 1 highways (classified as freeways and other major arterials in the U.S.). Under the planned design-build-finance-operate-maintain (DBFOM) P3, the selected company would build the facilities, collect the rent from tenants (gas stations, electric charging companies, restaurants), and pay a monthly fee to the province for 30 years. The new rest areas would offer 24-hour access to basic services such as parking, restrooms, and climate-controlled facilities. But the facilities will also offer commercial services such as fuel, electric vehicle charging, convenience retail, and restaurants.

Alberta’s current rest areas are underused because they lack commercial services. In addition, they are not always safe, making them a last resort for many drivers. And they are poorly maintained due to budget constraints.

Contrast Alberta’s approach with what Florida is now planning. The Florida Department of Transportation (FDOT) is proposing to add 11 truck parking areas on I-4 across four counties. In the corridor, an estimated 40% of truck drivers spend more than one hour looking for parking. Between the Osceola County-Polk County line and I-95, a distance of more than 100 miles in the corridor with more than four million people, there are only 36 truck parking spots. By 2025, FDOT estimates that the corridor will need 750 spots. Between 7,000 and 20,000 trucks use I-4 every day. That Interstate corridor has one of the largest parking space deficits, but almost every Interstate corridor in the country needs more parking. FDOT has identified 11 locations for new parking. But unlike Alberta, which is using a P3 to add commercial services, FDOT is merely adding parking spaces, not offering other amenities.

Florida DOT has typically been a leader in U.S. P3s, with three of the largest (by dollar value) transportation P3s in the country. Why won’t these truck stops offer fuel, electric vehicle charging, retail, and restaurants? Federal law makes offering any of these services illegal. When the Federal Aid Highway Act of 1956 was passed, one of the compromises was to prohibit commercial services at Interstate rest areas, even though states own their Interstate highways. As a result, the only food available comes from vending machines. The National Association of Truck Stop Operators (NATSO) has lobbied relentlessly to keep the ban in place. At a 2009 congressional hearing, the association’s president suggested that the commercial service ban was the only policy in the surface transportation reauthorization bill that the group cared about.

For some reason, NATSO thinks that all truckers who now patronize truck stops would switch to the commercial services at rest areas instead. Yet, the evidence on I-95 in Delaware and Maryland, which is a toll road that was grandfathered into the Interstate system and allowed to offer commercial services, is just the opposite. Many truckers and other motorists use the commercial service plazas, while others exit the highway to eat at restaurants or purchase fuel.

Further, the commercial service plazas can offer more than more parking and better food. The plazas on tolled Interstates (exempt from the federal ban) increasingly offer electric vehicle charging. High fuel prices have increased the demand for electric cars and trucks. Yet many travelers will not consider an electric vehicle due to range anxiety. The typical lower-priced EV needs to be recharged after 100 miles. Placing electric vehicle charging stations at rest areas will be a game-changer, encouraging long-distance travelers to purchase an EV.

Further, these improved Interstate rest areas can offer convenience retail, basically a 7-11 on steroids that will allow customers to get healthier food to go or basic clothing if they forgot to pack something.

It is time we move past the short-sighted views of NATSO. Congress needs to find a legislative vehicle to allow states, which own their Interstates, to use P3s to expand and offer commercial services at their rest areas. Service plazas need to offer 21st-century solutions such as ample parking, higher-quality food, and electric vehicle charging instead of remaining stuck in a 20th-century mentality.

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News Notes

Reason Seeks Additional Transportation Policy Analyst
Reason Foundation, the publisher of this newsletter, has an opening for an additional member of its transportation policy team, to work with me, Baruch Feigenbaum, Marc Scribner, and Vice President Adrian Moore. This is a full-time position, starting in the late spring or early summer of this year. A detailed description is available on the Reason Foundation website.

PennDOT Selects Winner for Major Bridge P3 Program
From among the four shortlisted teams, Pennsylvania DOT selected the team led by Macquarie and Shikun & Binui Concessions for its project to repair or replace up to nine bridges on its Interstate highways around the state. The first step will be a pre-development agreement under which the winning team will finalize the design and packaging of the bridges. The intent is to follow this with a long-term DBFOM agreement. Tolls will be charged to provide the revenue stream on which the project will be financed, but PennDOT will take the revenue risk and will compensate the P3 entity via availability payments. Late last year Gov. Tom Wolf (D-PA) vetoed a bill aimed at preventing the rebuilt or replaced bridges from having tolls.

Is It Time to Start Thinking About NEPA Reform?
In my column in the March issue of Public Works Financing, I discussed research that attributes much of the difference between very high U.S. highway and transit project costs (compared with other developed nations) to “citizen voice”—the ability of NIMBY and environmental groups to litigate endlessly to delay projects they oppose. The column suggests a potential bipartisan political opportunity to revise NEPA and other federal statutes to continue environmental impact studies but to limit or prevent endless litigation. The column is available on the Reason Foundation website.

World’s Longest Suspension Bridge Opens in Turkey
Thanks to a $2.7 billion long-term P3, Turkey now has a 6,637-foot suspension bridge across the Dardanelles Strait, linking the Asian and European shores of this important waterway. The new bridge’s name honors a battle in 1915 that took place in this area, hence the name “1915 Canakkale Bridge.” Travelers will pay a $13.60 toll to cross the channel on the bridge in six minutes, compared with the current 1.5-hour ferry trip. The P3 company is a consortium of Turkish and South Korean companies.

Mercedes Takes Legal Responsibility for New Driver Assist System
A new system called Drive Pilot, available on high-end Mercedes automobiles comes with a unique provision. It is considered a Level 3 system, which will not require the driver to be ready to take control. Hence, when Drive Pilot is in operation, Mercedes says it will assume all legal liability for any accident that might occur—a step no other auto company has taken. But there are limitations. Drive Pilot can only be used on certain highways, and the car cannot exceed 40 mph when operating in that mode. Also, Drive Pilot will operate only in daylight and in reasonably clear weather. And it is supposed to be able to give the driver a 10-second warning before it disengages.

New Toll Lanes Under Way in Northwest Austin
Despite a legislative ban on new toll projects in Texas, a project to add express toll lanes is getting under way on SH 183. This is taking place because the project is being carried out by the Central Texas Regional Mobility Authority (CTRMA), which built and operates the existing express toll lanes on the Mopac Expressway. The legislative ban applies only to projects that use TxDOT funds or are carried out under long-term P3 agreements. Existing toll agencies and regional mobility authorities are exempt. The tolls will be charged only on the newly added express toll lanes, and the $612 million project is also adding one general-purpose lane each way, along with adding two express toll lanes in each direction.

Waymo Joins Cruise with San Francisco Robotaxis
Waymo is launching a fully autonomous taxi service in a portion of San Francisco, initially serving only Waymo employees. Competitor Cruise launched a similar service several months ago, operating only at night. Both services currently charge no fees. Cruise is the only company that has a California PUC license to charge for robo-taxi service; Waymo can only charge for service if there is a safety driver in the vehicle.

Charlotte Express Toll Lanes Proving Popular
During the long process of getting approval to add express toll lanes to I-77 approaching downtown Charlotte, NC, fierce opposition arose from critics who claimed either that the lanes would attract so few users that they would not reduce congestion or that the pricing would not prevent the lanes from getting congested like the adjacent general-purpose lanes. But by the fourth quarter of 2021, the lanes generated $11.5 million from willing customers and are now projected to generate $45 million this year—$10 million more than projected prior to construction (and prior to COVID-19). This is a familiar pattern for the first express toll lane in a state or large metro area—most people simply don’t believe they will work. (See “After Slow Start, I-77 Toll Lane Revenue Is Surging,” Steve Harrison, WFAE, March 30, 2022)

$2.2 Billion Norwegian P3 Bridge/Tunnel Project Financed
The Sorta Link project will design, build, finance, operate and maintain a 9.4-kilometer four-lane highway connecting Bergen and Oygarden. Its large cost stems from the need to construct 4.6 km of twin-bore tunnels and a major bridge. The winning P3 team includes Macquarie Capital, SK Ecoplant, and WeBuild. Financial close on the project was reached on March 16. Once construction is completed, the P3 entity will operate and maintain the new link for 25 years. The project is a key portion of Norway’s 2018-2029 National Transport Plan.

Washington State Budgets $1.2 Billion Toward I-5 Bridge Replacement
Last month, the Washington legislature agreed on a $16 billion state infrastructure program that includes $1.2 billion for its share of the project to replace the obsolete I-5 bridges between Portland, OR, and Vancouver, WA. The replacement bridge’s configuration and total cost have not yet been decided between the two states, nor has the extent to which toll financing will be used.

Major New P3 Toll Road Financed in Bali
World Highways reported last month that construction will soon begin on the 97-kilometer Gilimanuk-Mengwi Toll Road on the Indonesian island of Bali. The project will include a parallel bikeway, a first in Indonesia. The $1.72 billion project is being developed as a DBFOM by a team headed by Tol Jagat Kerthi Bali, which won a 50-year concession to design, build, finance, operate, and maintain the new link.

MBUF Group Taps Important Data Provider
The Eastern Transportation Coalition last month announced a contract with Geotab Intelligent Transportation to obtain origin-destination and freight data for use in its ongoing MBUF research and pilot projects in 18 eastern states. Geotab’s Altitude data platform enables road providers (and researchers such as the TET Coalition) to identify problem areas and measure the impact of proposed policy changes.

Orlando Toll Road Provider to Add Elevated Toll Lanes
The five-county Central Florida Expressway Authority is planning a $365 million project to build 2.8 miles of elevated toll lanes to extend SR 414 between U.S. 441 and SR 434 in Maitland, a suburb of Orlando. The project is intended to reduce congestion on SR 414 and on Maitland Blvd.

New EPA Regulations for Trucks and Buses
The Environmental Protection Agency last month released proposed new regulations concerning nitrogen oxide (NOx) and CO2 emissions from commercial vehicles. The NOx regulations apply to all categories of commercial trucks, as well as school and transit buses. The CO2 regulations exclude heavy trucks but would apply to school and transit buses as well as delivery trucks and short-haul tractors. The proposed regulations are now open for public comment. The Truck and Engine Manufacturers Association appears supportive of the new rules but hopes to work with EPA on the details.

Correction Regarding TET Coalition Truck Projects
Nina Elter of EROAD wrote to explain that the Coalition’s 2020/21 truck pilot did not employ a weight-based rate structure, but the motor carrier working group did conclude that rates based on registered truck weight would be the best approach for the 2022 truck pilot. Also, the research done on the International Fuel Tax Agreement and the International Registration Plan showed enough promise that an interface with IFTA is being set up for the 2022 pilot. I greatly appreciate these corrections.

Correction Regarding Gondola News Note
John Charles from the Cascade Policy Institute wrote to explain that the gondola in Portland does not cross the Willamette River. It goes from the South Waterfront area on the river’s west bank up to the OHSU medical complex, crossing over I-5 on its way. Thanks to John for this local knowledge.

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Quotable Quotes

“[T]he [DOT] Secretary does not have much leeway to disapprove projects unless he finds that a project violates a specific federal law. Had the FHWA [guidance] document been phrased differently, using much of the same substance without cutting and pasting directly from the House Democratic bill that never became law it wouldn’t have drawn much attention. But the direct quotes from the rejected Democratic bill needlessly inflamed things, to the point that if and when Republicans take back the House of Representatives next year, here is what’s probably going to happen. The House version of the fiscal 2024 DOT Appropriations bill will include general provisions nullifying the FHWA policy document or denying funds for US DOT if they use any of that language in NOFOs [notices of funding opportunities] or regulations. Then, depending on how the Senate elections go, those House riders may get the support of a narrow majority of the Senate Appropriations Committee, in which case the Biden Administration would have to trade hundreds of millions of dollars in real money, or a policy limitation in another area, to get those riders out of the appropriations bill.”
—Jeff Davis, “Sec. Buttigieg Defends DOT’s Implementation of Infrastructure Bill Before Senate,” Eno Transportation Weekly, Feb. 28, 2022

“The IMF, in a report published in September 2021, found that fossil fuels are still receiving [annual] subsidies of $5.9 trillion, or $11 million a minute. So the same governments signing pledges to reduce carbon dioxide emissions in the framework of the Paris agreement, as witnessed at the COP26 summit in Glasgow are, in the same breath, actively promoting the use of carbon to support the unsustainable growth of our economies.”
—Andre Hoffman, vice chairman of Roche in “Subsidies to Fossil Fuels,” Letters, The Economist, March 12, 2022

“I do believe that overall, toll payment will become more seamless and less explicit for the end user. Toll will not be collected directly by authorities and road agencies any longer, but increasingly via service providers which offer toll payments as one element of their mobility services portfolios. Those service providers may be vehicle manufacturers, fleet service providers, insurance companies, MaaS providers, or today’s toll service providers who will evolve into broader mobility payment service providers.”
—Peter Ummenhofer, GO Consulting, in “Tolling Industry Discussions, Toll Insight, March 22, 2022

“We want government to invest in infrastructure that gets a high utilization (as opposed to roads to nowhere). If they built a new airport runway and it filled up with flights, people would sing the praises of such a great investment. Yet if we invest in additional freeway capacity and it fills up, it was wasted money? How does that make sense? It means the government built mobility infrastructure exactly where people needed it—where there was unmet demand—and isn’t that exactly what we want them to do as taxpayers?”
—Tory Gattis, Urban Reform Institute, email to Robert Poole, March 9, 2022

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The post Surface Transportation News: Pandemic and migration change transportation plans, supply chain crisis, and more appeared first on Reason Foundation.

• Florida DOT opens world’s most-advanced express toll lanes
• EV charging will not target Interstate highways
• Mileage-based user fee study breaks new ground
• DOT’s unserious supply chain proposal
• The 15-minute city?
• An expert’s assessment of automated vehicles
• News Notes
• Quotable Quotes

Florida DOT Opens World’s Most-Advanced Express Toll Lanes

At the end of February, Florida Department of Transportation (FDOT) opened to traffic its $2.4 billion I-4 Ultimate project, after seven years of construction to rebuild 20 miles of congested I-4 through downtown Orlando, with two express toll lanes added each way in the median. The project rebuilt 15 major interchanges and widened 140 existing bridges. I attended a briefing on the project in late January at the annual meeting of TEAM Florida, the toll industry organization in Florida. FDOT engineer Jeremy Dilmore provided many details of the project, leading me to conclude that it is the most-advanced express toll lane project implemented to date.

The express lanes are located in the median of the widened Interstate, with concrete Jersey barriers separating them from the general purpose (GP) lanes (in addition to a median barrier, of course), to provide additional safety and fewer illegal cut-ins through plastic pylons used on many other express lanes. Where feasible, entry and exit to the express lanes is provided via direct connection ramps and elsewhere via more-conventional slip ramps from the adjacent general purpose lanes. The express lanes are priced by segment, with six variable-toll gantries westbound and seven eastbound.

The redesigned and rebuilt I-4 for these 20 route-miles now includes ramp meters in use during high-traffic periods to smooth out the entry of vehicles into the general purpose lanes. Each ramp meter traffic signal’s green-light interval is based on actual I-4 traffic volume, rather than being pre-set for peak periods. Other sensors detect whether there is a backup onto the surface street feeding the on-ramp and adjust the signal timing accordingly.

As with other Florida express toll lanes, a transponder is required for use. License plates are read for identification and enforcement purposes, but there is no “toll-by-plate” option, which is more costly to collect. Compatible transponders, in addition to the statewide SunPass, include several other Florida transponders, Georgia Peach Pass, North Carolina QuickPass, and multi-state E-ZPass.

Eligible vehicles include any two-axle vehicle with one of the above transponders plus registered buses and vanpools. There are no high-occupancy vehicle (HOV) or “green” vehicle discounts or freebies, which would reduce the effectiveness of variable pricing and reduce the revenue needed to help cover the project’s $2.4 billion cost.

Not included in Mr. Dilmore’s slides but revealed during the Q&A period is this important development. FDOT has reached agreements with Waze and Google Maps to provide real-time data on posted variable toll rates on the I-4 express lanes so that travelers can make their own trade-off between avoiding the general purpose lanes congestion and the price of doing so. This is an important precedent that should be expanded to all high occupancy toll (HOT) and express toll lane facilities around the country.

Finally, it’s widely known that FDOT is already in the planning stages for extending these express toll lanes both northward and southward on I-4 in the coming years. But in addition, FDOT announced last month that it plans to use some of the new federal money allocated to Florida to fast-track the extension of the westbound toll lanes from where they end near Kirkman Road to facilitate access to Walt Disney World at Epcot Center Drive (SR 536). It will be a single westbound toll lane, eliminating what would otherwise have been a difficult merge.

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EV Charging Will Not Target Interstate Highways

The Federal Highway Administration (FHWA) released its National Electric Vehicle Infrastructure (NEVI) Formula Program Guidance document on Feb. 10. Contrary to a Wall Street Journal headline the same day, the program will exclude Interstate highways from having electric vehicle charging facilities. The only change the guidance document made to the previous policy was that the new money should be spent on facilities located no more than one mile (as opposed to five miles) from an Interstate off-ramp.

Prior to releasing this document, FHWA had issued a request for information (RFI) about electric vehicle (EV) charging. Members of a large, ad-hoc coalition including state transportation departments, EV organizations, environmental groups, and others submitted comments by the Jan. 28 due date, arguing (among other things) for opening up Interstate rest areas to EV charging, despite the long-standing legal ban in 23 USC 111 that prohibits commercial services (other than vending machines) at rest areas.

The submission from the International Bridge, Tunnel and Turnpike Association argued that the offending federal code section “should be revised to address barriers to sales of electricity along federal-aid highways” and more broadly “to allow commercial activity”—which would require a change in federal law. Ironically, the 2021 House surface transportation bill (rejected in favor of the Senate bill that became the bipartisan infrastructure law) included a legal change to allow electric charging at Interstate rest areas.

A number of members of the “23-111” coalition proposed a change that FHWA arguably could have made without new legislation. For example, the Ohio Department of Transportation’s submission argued that “FHWA can expand the definition of vending under 23 USC 111 to include EV charging, which would effectively eliminate the barrier at rest areas. The expansion would give State Departments of Transportation flexibility to engage public-private partners in the deployment of EV charging infrastructure, and drivers and fleet operators choice. . . . This administrative change can be executed immediately, under FHWA’s existing authority and without congressional approval.”

Given the very short time between the deadline to submit RFI comments (Jan. 28) and the release of the FHWA guidance documents (Feb. 10), one DOT director emailed, “Received guidance this morning. Fairly obvious that FHWA didn’t take RFI comments into account, since the comment period closed just 7 working days ago.” That jibes with this comment from a transportation colleague of mine: “That lines up with chatter I heard at the TRB [annual] meeting in early January, that FHWA’s guidance was already fully baked and that the RFI was just going through the motions.”

Whatever its reasons for ignoring the “vending machine” proposal, FHWA has set back what could have been a robust effort by state transportation departments and commercial partners to expand lackluster Interstate rest areas with convenient and easily accessible electric vehicle charging facilities, for motorists and commercial vehicles alike.  

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Mileage-Based User Fees Study Breaks New Ground

The idea of replacing per-gallon fuel taxes with per-mile charges (aka Mileage-Based User Fees—MBUFs) has received national attention since at least 2009, when Paying Our Way: A New Framework for Transportation Finance was released as the final report of the National Surface Transportation Infrastructure Financing Commission. After examining dozens of options, the commission members concluded that MBUF was the best and fairest approach. Since that time, a dozen states have embarked on pilot projects to test highway user reaction to paying per mile, rather than per gallon. Congress has been offering grant funds for these pilots since 2008, and much has been learned from them.

Last month, The Eastern Transportation Coalition (TET Coalition) released a report on what it has learned from several multi-state MBUF pilot projects, two of them involving serious participation from trucking company fleets. The 108-page report offers important findings and conclusions, based on those ambitious multi-state pilots.

First let’s review the major findings, which reinforce what single-state pilot projects have learned. After that, I’ll discuss the coalition’s important new findings on MBUFs and trucking.

One of the most important findings is that while motorist privacy is a well-known concern, the TET Coalition found that 52% of participants began the pilot with privacy concerns, but by the end of the pilot only 7% still had those concerns. The combination of having alternative ways of reporting miles driven, understanding what various technologies do and don’t do, and serious, believable privacy-protection rules seems to be responsible for that dramatic change. This is very positive for the future of mileage-based user fees.

Not mentioned in the report’s summary is the fact that the coalition’s pilots (like nearly all the others) stressed that the MBUF would replace fuel taxes, not supplement them. That is critically important for gaining enough public support to achieve the intended transition.

Another key finding debunks—with data—the widespread belief that shifting to per-mile charges would disadvantage rural drivers. The TET Coalition’s findings reinforce those of most state pilot projects—specifically, that on average rural drivers would pay a bit less under an MBUF system and urban drivers may pay a bit more. That is because—again, on average—rural residents drive older, less fuel-efficient vehicles so that even if they drive somewhat more miles per year than urban drivers, they would end up paying slightly less than they do under current fuel taxes.

Most of the drivers in the 2020-21 pilot were from Delaware, New Jersey, North Carolina, and Pennsylvania. The data for these states showed that the average rural driver in each would pay $9 less per year (DE), $13 less per year (NJ), $17 less a year (NC), and $34 less per year (PA).

In my view, the most important new findings in the 2020-21 national pilot concern the trucking industry. It included 221 trucks (mostly 80,000-pound Class 8 big rigs) from 21 different operators, logging 11 million miles that included all 48 contiguous states over the six-month National Truck Pilot. Each truck had an onboard unit provided by EROAD that recorded and reported miles, by state, and which interfaced with the existing International Fuel Tax Agreement (IFTA) and International Registration Plan (IRP)—two institutions created decades ago to give state and (Canadian) provincial governments and the trucking industry the data needed to divvy up fuel tax revenues fairly.

In the TET coalition’s earlier truck pilot (2018-2019), the MBUF rate was linked to a truck’s miles per gallon category, in an effort to be “fair” to fleets with older and newer vehicles. One finding from that pilot was that this ended up penalizing trucks with the best fuel economy and undercharging those with the worst fuel economy (but which produce the same amount of wear and tear on the highway). The national pilot (2020-2021) shifted to a weight-based formula for the MBUF, so that trucks in a given weight category would all pay the same state per-mile rate. This sensible change came about in part due to the deliberations of the coalition’s new Motor Carrier Working Group, which includes members from trucking companies, trucking associations, truck producers, freight shippers, and regulators. While the working group is actively participating in MBUF pilots and policy discussions, it does so with the proviso that at this time, participation “does not equate to support of MBUF,” which is an understandable position at this stage.

The Working Group’s Rate Setting Task Force worked on that topic during 2021 and concluded that using weight is a better approach than mpg, as the basis for MBUF rates. Another key point was that policy makers should understand and work with the long-standing IFTA and IRP as organizations that could evolve to play key roles in operating a national approach to truck MBUFs. And the coalition’s report promises that “In future work, the coalition will test the feasibility of incorporating [truck] MBUF into the existing IFTA and IRP systems.”

Yet another strong recommendation from the working group is that funding increases over time from the shift away from declining fuel-tax revenue should be spent on roads and bridges, referred to as the truckers’ workplace. This is breakthrough stuff. The TET Coalition and the Motor Carrier Working Group deserve our appreciation for moving this country further toward a workable transition to mileage-based user fees.

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The Department of Transportation’s Unserious Supply Chain Proposals
By Marc Scribner

On Feb. 24, exactly one year after President Joe Biden signed Executive Order 14017 on America’s supply chains, the administration released a 10-point plan, seven agency-specific reports, and a summary “capstone report” aimed at diagnosing and treating America’s supply chain afflictions. Those materials are available here.

As expected, this anniversary fete was primarily about repackaging past campaign rhetoric and policy commitments to partisan political constituencies rather than advancing evidence-based policy to address specific problems. However, several claims made by the Biden administration, and in particular from U.S. Department of Transportation (DOT), deserve closer scrutiny because they reflect a profound lack of seriousness. Some of these policy recommendations would worsen and prolong the supply chain crisis (and in some cases, already have)—something Congress should seek to avoid.

The U.S. Department of Transportation’s report is titled “Freight and Logistics Supply Chain Assessment.” It contains 62 policy recommendations that follow from 17 policy goals, which in turn are categorized into five federal policy roles: infrastructure investment, planning and technical assistance, research and data, rules and regulations, and coordination and partnerships. Each of the 62 policy recommendations is characterized by anticipated impact, cost, and level of complexity.

While most would have little impact, some of the goals and policy recommendations are quite reasonable for addressing supply chain problems. For instance, as part of the federal role of “Infrastructure Investment” and under the goal of “Address supply chain bottlenecks,” recommendation eight reads, “Support State DOTs and the private sector to develop and implement strategies that expand truck parking availability consistent with local land use considerations and address safety of rest areas.” This was characterized as having a high impact, medium cost, and medium complexity.

Others are less reasonable and, in some cases, don’t mention that these policies have already failed. For example, as part of the federal role of “Rules and Regulations” and under the goal of “Support domestic production of critical equipment” (a dubious protectionist goal to begin with), recommendation 46 calls for “focus[ing] on increasing domestic manufacturing of new chassis, containers…”

Unfortunately, the Biden administration has already implemented this policy, with the terrible results many predicted. Ignoring warnings from supply chain and logistics experts, the Biden administration increased the Trump administration-initiated tariffs on Chinese intermodal container chassis from 25% to 246% in 2021, more than tripling the price of these chassis that represented 85% of the market. Rather than bolster American competitiveness in chassis manufacturing, the Trump-Biden chassis import taxes exacerbated critical equipment shortages that have been identified as one of the primary supply chain chokepoints. Amusingly, the DOT report characterized this policy recommendation as having the highest impact, a medium cost, and medium complexity.

Recommendation 42 urges the administration to “consider the ways in which [trade policy actions] might impact relevant supply chains.” To be sure, DOT has no role in President Biden’s imprudent and destructive tariffs that he could unilaterally repeal at trivial cost to the Treasury, but this recommendation highlights the blinkered viewpoint presented in the DOT report and the shallowness of the administration’s entire E.O. 14017 dog and pony show.

Other lowlights include:

• Recommendation 7: Explore the potential to increase U.S.-flagged ships, shipping companies, and shipbuilding. The Jones Act and cargo preference laws have attempted to do this for more than a century. The results have been a moribund domestic shipbuilding industry, fewer transportation choices at higher prices, and more brittle international logistics networks.
• Recommendation 40: Urge Congress to eliminate the Fair Labor Standards Act motor carrier exemption. Setting aside the debate on the merits, increasing transportation costs would not improve the current supply chain situation.
• Recommendation 43: Support the Federal Maritime Commission (FMC) in regulating ocean carriers to promote free and fair competition. This is in support of, among other things, a crackdown on detention and demurrage fees, which are effectively congestion charges and one of the few tools carriers possess to incentivize customers to increase container velocity.

But perhaps the strangest and most counterproductive recommendation in the DOT report relates to freight rail. Under the policy goal of “Strengthen market competition and fairness,” recommendation 45 reads, “Encourage the STB to require railroad track owners to provide rights of way to passenger rail and to strengthen their obligations to treat other freight companies fairly,” categorized as having a high impact, a low cost, with high complexity.

This is less of a recommendation than a clumsy reference to two ongoing proceedings at STB. The first relates to a petition filed by Amtrak demanding access to tracks owned by freight railroads between Mobile, Alabama, and New Orleans. Along with the CSX and Norfolk Southern track owners, dozens of freight rail customers filed comments in opposition, warning of more delay and less reliable service that would result from granting Amtrak’s Gulf Coast petition. This is viewed as a bellwether case with national implications, as was discussed in the May 2021 and January 2022 issues of this newsletter. Reason Foundation also submitted comments to the STB in February.

The second relates to a proposal from the STB—previously endorsed in Executive Order 14036 from July 2021—that would modify regulations governing mandatory “reciprocal switching.” Reciprocal switching refers to a practice where one rail carrier exchanges the car(s) of another in order to allow a customer access to a facility served by only one carrier. This allows the competing carrier to offer single-line service to the customer even though its track does not physically reach a customer’s facility.

Railroads voluntarily enter into reciprocal switching arrangements when it makes sense for the parties involved, but railroads warn that a new mandate will increase operational complexity and result in travel delays. The Association of American Railroads offers an example where switching a single railcar requires 68 locomotive operations, the use of three switching yards, and six days to complete. And because this regulatory proposal aims to drive down rates similar to a price control, another anticipated outcome is reduced capital expenditure from rail carriers as investors move to safeguard their returns. Rather than improving the flow of goods and strengthening supply chains, the STB’s proposed reciprocal switching regulations would likely harm both short- and long-run supply chain resilience. Reason also submitted comments to the STB in February.

DOT’s report paints a troubling portrait of an administration failing to methodically identify and address very real supply chain challenges. There are no quick fixes to the supply chain crisis, but Congress could prevent the executive branch from making it worse through aggressive oversight, use of the Congressional Review Act, and exercising its power of the purse.

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The 15-Minute City?

One of the trendier ideas in urban planning in recent years has been the “30-minute city.” It is being advocated by academics who focus on “access to destinations” rather than travel speed, including David Levinson, who pioneered some of the “access” studies when he was at the University of Minnesota. The idea is that cities and transportation should be modified so that every resident can get to all relevant destinations in 30 minutes. It hasn’t seemed to bother advocates of this idea that the University of Minnesota studies of access to workplaces showed that in the largest 50 U.S. metro areas, most people can reach the large majority of employment opportunities by car in 30 minutes or less. But they can access only a small fraction of job locations in 30 minutes via transit.

But more recently, some mayors and planners have upped the ante. As former World Bank urban planner and now New York University scholar Alain Bertaud pointed out in a new paper, one of the many candidates in last year’s race for mayor of New York City, Shaun Donovan, proposed making New York a 15-minute city. “With my 15-minute neighborhood plan, every New Yorker will have access to a great education, rapid transportation, fresh food, parks, and everything they need to live a high-quality life within 15 minutes of their front door,” Donovan said.

More worryingly, Paris Mayor Anne Hidalgo has embraced the “15-minute city” idea. That, in part, spurred Bertaud to write his new short paper, “The Last Utopia: The 15-Minute City.” In the paper Bertaud presents data on Paris as it actually exists, evaluating the current accessibility of food shops, kindergartens, primary schools, and jobs within walking distance of people’s residences. Since the farthest an average person can walk in 15 minutes is about 1,125 meters (0.7 mile), one can draw a circle of that radius around each residence, an area of 398 hectares (983 acres). But given the pattern of Paris streets, he reduces this to a polygon of about 300 hectares (741 acres). That represents about 3.4% of the municipal territory, within which all the important destinations must exist. The density of Paris implies an average of 77,000 people within that polygon.

Drawing on the database of Atelier Parisien d’Urbanisme (APUR), Bertaud finds that there are, on average, 59 bakeries and 197 food shops in such a polygon. (It is Paris we are talking about, after all.) Kindergartens and primary schools are also widely distributed, he finds (though private schools are not included in the database). But he points out that Paris does not have the kind of zoning restrictions typical of New York and most other U.S. cities, so the same finding is unlikely here.

Next Bertaud turns to cultural venues—concerts, ballets, museums. This presents a major challenge to the 15-minute city, since in Paris and everywhere else, such venues are few and far between—and the large majority are not reachable on foot in 15 minutes. “How many Parisians prefer to attend a concert, a ballet, or an opera at a neighborhood school rather than the Garnier Opera House, Operat Bastille, or the Bataclan? Not very many.”

Finally, he turns to jobs and commuting. Bertaud presents a bar graph showing what fraction of the Paris population has commuting trips of various durations. Only 12% can get to work in 15 minutes or less, with 65% having commutes between 15 and 45 minutes, 15% with 45 to 59 minutes, and 8% with 60 minutes or more. And this is just for the city of Paris, not for the much larger Paris metro area. In fact, many of those who work in the city commute from outside it, including from far suburbs. And a smaller fraction of those living in the city work outside it. As Bertaud observes, “While many jobs are available within walking distance, many Parisians choose a distant commute . . . . That is precisely how labor markets work.”

In other writings, Bertaud has described large urban areas as job markets, and explained that the benefits of urban agglomeration emerge from the higher overall economic productivity that comes from employers being able to find the most capable employees drawing on the vast population—which also holds true for employees being able to find the best job opportunity to maximize their own economic returns, job satisfaction, etc. Proposals that would (somehow) restrict people to finding “a job” within 15 minutes of their home are a recipe for economic stagnation. Any metro area foolish enough to attempt such coercive planning would pay a high price in lost economic productivity.

Note: I have previously recommended Bertaud’s book, Order Without Design: How Markets Shape Cities, MIT Press, 2018. It includes extensive discussion of transportation policies consistent with maximizing urban agglomeration benefits.

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An Expert’s Assessment of Automated Vehicles in 2022
By Baruch Feigenbaum

During the last 10 years, the development of automated vehicles (AVs) has cycled through at least three of the five phases of the Gartner Hype Cycle (Innovation Trigger, Peak of Inflated Expectations, Trough of Disillusionment). Attendance at the Transportation Research Board’s Automated Vehicle Symposium grew from fewer than 100 in 2012 to more than 1,500 in 2018. Along with the increasing crowds came an increasingly unrealistic deployment timeline for automated vehicles. For example, Nissan promised to bring a fully autonomous vehicle to market by 2020.

However, not everybody bought into the hype. One of the pioneers in the automated vehicle space is retired University of California Berkeley Professor Steve Shladover, who founded the California Partners for Advanced Transportation Technology (PATH) in the mid 1980s. Shladover, who helps organize the TRB conference, has long been one of the most realistic, at forecasting AVs.

Predicting technological developments is challenging. For example, who thought that in 2022 due to a global pandemic and computer chip shortage that many customers would have to preorder their new automobiles? While few expect the trend of paying as much as $10,000 above sticker price to continue, most expect the large discounts to be a thing of the past. And since we live in a world in which outlandish headlines receive the highest readership level, the popular press has gone from hyping AVs to issuing doomsday predictions about AVs such as a Forbes article predicting that chip shortages will Slam Future Self-Driving Car Rollouts. 

While pundits often swing from one outlandish prediction to another, Shladover provides a balanced view in the journal Sustainability article Opportunities, Challenges, and Uncertainties in Urban Road Transport Automation, which provides an overview of the current state of AV technology and an explanation of future development.

The article starts by providing some background on urban transportation. In the 1970s, automated people movers (both airport trains and pod-like vehicles) were introduced, but the latter have become obsolete due to the high per capita costs. The Defense Advanced Research Projects Agency (DARPA) turbocharged AV research in the U.S., at the same time Europe and Japan began researching automated transportation systems.

After providing some definitions, Shladover lists the benefits of AVs such as reductions in crash frequency and severity as well as increased accessibility for disadvantaged drivers. But he points out there are numerous uncertainties such as investors’ patience, technology development, costs, and public attitudes.

Shladover examines AV technology by Operational Design Domain (ODD) such as geographic location, roadway class, and traffic control devices. After self-driving airport trains, the next least-complicated deployment is low-speed passenger shuttle vans, such as EasyMile. However, at current speeds, these services are too slow to be effective transport. 

One promising technology is sidewalk robots. These devices transport restaurant meals or groceries, particularly for students living near universities. While these devices can reduce traffic congestion, they have their own challenges. For example, they would be most cost-effective in the densest settings, but how many sidewalks in Manhattan have room for these devices? They also face external threats. Young children might want to play with them and others might want to damage them.

Another application that is developing is package delivery. Growth in e-commerce and home delivery of food as well as the challenge in finding drivers may make this a commercially viable technology.

However, other areas are fading from interest. Automating ride-hailing has proven challenging because the urban environment in which these vehicles operate is the hardest to automate. In addition, this technology does not scale well; rain/snow complicate operations. Finally, COVID-19 has shifted research from manned to unmanned vehicles.

Developing personal AVs is very important to the automotive industry. However, while Society of Automotive Engineers (SAE) Level 2 AVs are becoming common, Level 3 AVs have not yet been introduced, and Level 4 AVs remain years away. Even when Level 4 AVs are deployed, they will only be used in selected locations. How many drivers, either for individual use or fleets, will pay extra for technology that can be used in a limited number of locations? And manufacturers will have to determine how to maintain and support the vehicles.

AV technologies need further refinement. While many vehicles have multiple sensors, these sensors are not great at predicting the future motions of actors. For example, my new Level 2 AV has 360-degree camera technology, lane-keeping technology, dynamic cruise control, emergency braking, and more. Yet the camera cannot pick up a vehicle traveling perpendicular to my vehicle. The dynamic cruise control keeps my vehicle too far behind the vehicle in front of me. And I would not bet my life on the emergency braking. Right now, these technologies are optional equipment designed to sell vehicles. For Level-4 AVs to become widespread, this technology has to be foolproof. Even then the automated driving system (ADS) software will not be able manage every situation it encounters and will need access to remote support options.

Further, public and private entities need to do a better job at providing the physical infrastructure such as pavement markings and signs as well as the digital infrastructure such as mapping and real-time traffic signal phases.

Deploying AVs comes with its own uncertainties. If the current shortage of computer chips has taught us anything, it is that companies need to allow enough slack for uncertainties. This uncertainty is not limited to parts but includes the amount of risk companies will accept for accidents, the infrastructure that AVs can use (managed lanes for example), and the amount of deadheading mileage for Uber and Lyft. There are also demand uncertainties including federal motor vehicle certification, public perception of the technology, and how the technology is portrayed in the media.

Therefore, Shladover expects AVs to lag electrification and shared-use (the other two of the three revolutions introduced by Dan Sterling of UC Davis). That prediction makes sense since there are 20 electric vehicles on sale for model year 2022 and two companies—LyftLine and UberX Share—that offer shared rides. Level 4 AVs are on the horizon, but developers have many miles to travel before they reach thier destination.

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News Notes

What Is—and Isn’t—Induced Demand?
Opponents of highway capacity expansion tend to label any project to add lanes to a bridge or highway as almost certain to “induce demand’—meaning to motivate people to take motor-vehicle trips that they would not otherwise have taken. Long-time highway and transit researcher Steven Polzin has provided a careful assessment of factors that may lead to highway expansion projects and shows that of five different causes, only two have some prospect of inducing new demand. “Induced Demand’s Effect on Freeway Expansion” is a must-read for state DOTs and MPOs. Go here.

Georgia DOT Shifts to Revenue-Risk P3 for SR 400 Express Toll Lanes
Echoing its 2021 decision to procure three major express toll lane projects on I-285 as revenue-risk DBFOM P3s, on Feb. 22 GDOT announced that has decided to re-start its SR 400 project using that procurement model. It will hold a virtual industry forum this month and plans to issue a Request for Qualifications (RFQ) in the second quarter of this year, with an RFP likely in the third quarter. The next P3 project to be launched after that will be the first of the I-285 projects, I-285/I-20 West, with an RFQ planned for the first quarter of 2023.

House Republicans ask Buttigieg to Rescind FHWA Guidance Letter
Nearly all GOP members of the House Transportation & Infrastructure Committee on March 7 sent a letter to DOT Secretary Pete Buttigieg asking him to rescind the controversial “guidance” letter that FHWA released in December. It “impermissibly contradicts and seeks to replace sections of the [Bipartisan Infrastructure Law] and could “delay or deter critical road and highway expansion projects in clear defiance of the law and congressional intent.” The letter also argues that the guidance letter conflicts with the One Federal Decision policy which the BIL codified as federal law, limiting the environmental review process for all major highway projects to two years, “with no designation of priority.”

Virgin Hyperloop Abandons Passenger Market
In a surprising Feb. 22 announcement, Virgin Hyperloop announced that it was shifting its focus from passengers to freight, as a less-risky business plan. As part of this change in plans, it laid off 111 people—about half its staff. The change will simplify safety and regulatory burdens, noted 76% shareholder DP World, in comments to the Financial Times. Virgin Hyperloop says it is in discussions with 15 customers for a cargo version of hyperloop. The following week a group planning a high-speed passenger train between Dallas and Ft. Worth selected conventional high-speed rail over hyperloop, without reference to the recent Virgin Hyperloop decision.

Transportation Groups Oppose “Gas Tax Holiday”
A proposal from congressional Democrats would suspend the collection of the 18.4 cents per gallon federal gasoline tax through the end of 2022. A similar proposal to suspend the state gas tax in fast-growing Florida has been proposed by Republican Gov. Ron DeSantis (who is also up for re-election in November) and by Republicans in other states. Highway and transit groups are united in opposing these proposals, which would create yet another shortfall in highway user tax revenue. Even without the proposed “tax holiday,” the Treasury Department’s March 2022 Bulletin projects that despite the huge general-fund bailout included in the bipartisan infrastructure law, the Highway Trust Fund will be $12 billion short by the end of the five-year reauthorization period (Sept. 2026).

Cruise Operating True Driverless Robo-Taxis in San Francisco
Beginning last month, autonomous vehicle startup Cruise is operating a limited number of truly driverless robo-taxis in a portion of San Francisco. Initially, there is no charge, but the company plans to offer fares lower than what Uber and Lyft charge, and hopes to make money since it will not have to cover the cost of a human safety driver in each vehicle. Competitor Waymo is operating an AV fleet there with onboard safety drivers that has served “hundreds” of rides per week, as of late February.
 
Brazil Announced Another Huge P3 Highway Program
World Highways reports that during 2022 the national government of Brazil will open tenders for 14 highway projects totaling $14.43 billion. These will all likely be toll roads, as in previous tenders using long-term public/private partnerships (P3s). In parallel, state governments such as Minais Gerais and Sao Paulo also have forthcoming tenders for large-scale P3 highway projects.

The Case for Solid-State EV Batteries
The American Society of Mechanical Engineers (ASME) has provided an article summarizing a new report from ADTechEX called “Solid-State and Polymer Batteries 2021-2031.” Without a liquid electrolyte as in current lithium-ion batteries, those under development are expected to have far less fire risk, use less-expensive materials, be thinner and lighter, be capable of much faster recharging, and retain their power capacity over as many as 5,000 charging cycles, rather than only 1,000. That’s a huge set of advantages, which is why lots of money is being spent on solid-state R&D. EVs, like autonomous vehicles, have been the subject of enormous hype, and the same might be true of solid-state batteries. But if they work out as hoped, they will revolutionize electric vehicles.

Financial Close for Another Virginia Express Toll Lanes Project
Back in October, Virginia DOT and Transurban reached a comprehensive P3 agreement to extend their existing express toll lanes network on the Capital Beltway (I-495) northward by 2.5 miles to the George Washington Parkway and the approach to the American Legion Bridge across the Potomac River to Maryland. A much larger P3 project, still in the final approval stages, will rebuild that bridge with express toll lanes added, and extend those lanes further north to I-270 and onto that urban Interstate. Transurban reached financial close on the I-495NEXT project on March 1. The financing is a mix of tax-exempt Private Activity Bonds (PABs), a TIFIA loan, a Virginia Transportation Infrastructure loan and sponsor equity.

Extension of Florida Toll Road Opens to Traffic
Late last month, a 13-mile northward extension of the Suncoast Parkway opened to traffic after several years of construction by Florida’s Turnpike Enterprise. Another three-mile northward extension is scheduled to begin early next year. There is popular support for the project, both to relieve congestion on nearby highways and to bring economic development to this largely rural area south of the Tampa Bay metro area.

ATRI Lists Top 100 Truck Bottlenecks as of 2022
As it does every year, the American Transportation Research Institute has used truck GPS data from over a million freight trucks to measure traffic delays, most of them at major interchanges. The top 10 bottlenecks are all long-standing entrants on this annual table, with I-95 at SR 4 in Fort Lee, NJ once again in the number one position. Of the top 10, the only one that I know is scheduled for major reconstruction is the fourth-worst: I-285 at I-85 north in Atlanta, which is now planned as a revenue-risk P3 project by Georgia DOT, which will rebuild the interchange adding two express toll lanes in each direction. Another in the top 10—I-45 at I-69/US 59 in Houston—is the subject of an inquiry by U.S. DOT and may not go forward as planned.

Misusing License Plate Reading Systems?
A controversy is brewing on Marco Island, FL. There are only two bridges to gain access to the island. To identify vehicles associated with wanted persons, the island’s police department has deployed automatic license plate readers (ALPRs) on the island, and three residents have filed suit arguing privacy violations. That is not because of the ALPRs per se, despite headlines implying that. The privacy concern is due to the police department retaining all that information indefinitely. The problem is the database, not the ALPRs.

Toll Road Traffic Averaged 81% Recovery by September 2021
In a Feb. 16 report, Fitch Ratings recorded solid growth in traffic on America’s toll roads during the first three quarters of 2021. The comparisons are to 2019 data, considered the normal level of activity before the COVID-19 pandemic. The 81% figure is the average of all 50 toll facilities rated by Fitch, including bond-financed express toll lanes. In faster-growing states, toll traffic is higher than the average, and in some cases is now exceeding comparable 2019 data. On the other hand, toll bridges in the San Francisco area are showing slower than average recovery, apparently due to the high level of telecommuting in that region. The report is “U.S. Airports & Toll Roads Traffic Monitor,” covering third quarter 2021.

Musk Vegas Tunnel First Link Breakthrough
The Las Vegas Loop, being build by Elon Musk’s Boring Company has used its tunnel boring machine to drill the first link of the planned Vegas Loop. Named Prufrock-1, the machine broke through a concrete wall beneath Resorts World, linking it to the Las Vegas Convention Center, where the Boring Company’s initial 0.8-mile tunnel is in operation. The new 29-mile tunnel system, with 51 stations, is estimated to cost the company $52.5 million to build. The company hopes to recover its cost from the fares it will charge.

Nikola Motors Loses Staff, Adds Hiring Freeze, Says Elektrek
The company that made a big splash several years ago showing a sleek Class 8 truck apparently driving along a highway powered by hydrogen was actually a “glider,” filmed rolling along a downhill road not under its own power. The resulting publicity led to the ousting of founder Trevor Milton, who faces various fraud charges. Meanwhile, the new management announced plans to build battery-electric trucks in addition to hydrogen trucks, but has not produced or sold any of either. In early February, Electrek reported that key officials of its supply chain staff have departed and that the company has implemented a hiring freeze. Following the publication of its article, Nikola issued a statement saying the supply chain department is intact and that it continues to hire.

Oklahoma Turnpike Selling Bonds to Finance Turnpike Widening
The Oklahoma Turnpike Authority plans a $1.1 billion project to widen a 60-mile stretch of its Turner Turnpike (I-44) between I-35 and Bristow. It is one of the projects to be financed by an upcoming $5 billion bond issue. Other projects in the plan include widening a 12-mile stretch of the Will Rogers Turnpike and building a connector road between the Gilcrease Expressway and the Tisdale Parkway.

And Now for Something Completely Different
An article in Fast Company calls urban gondolas a “viable transit option” that a number of cities are taking a serious look at. A few existing systems exist, including in Medellin (Colombia), La Paz (Bolivia), and Ankara (Turkey). But so far the concept has not caught on here, except for short (less than one mile) tramways across rivers in New York (Roosevelt Island) and Portland, OR (Willamette River). Several transit agencies that looked into the idea seven years ago may seek funding from the newly expanded federal transit program. If any such proposals materialize, they should be required to demonstrate likely (not potential) passenger throughput in passenger miles per hour, compared with performance and cost figures for competing modes.

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Quotable Quotes

“Knock 18 cents off the price of a gallon, and it’s a fair bet that your local gas station would just raise the price by, to pick a number at random, 18 cents—padding its bottom line without giving you any discount. Not only that, but before Election Day the price of gas will go up and down approximately 267 times, because that’s the number of days between now and then. Maybe prices will be higher in December than they are now, and maybe they will be lower; no one knows for sure. So even if [the politicians] get a day’s worth of positive coverage about how [they] cut the gas tax to give folks some much-needed relief, they are likely to forget about it, if they ever hear about it in the first place.”
—Paul Waldman, “Federal Gas Tax Holiday Is a Foolish Idea by Democrats,” The Washington Post, Feb. 17, 2022

“Most people don’t know that the region was designed to have not one but three concentric roads around DC. That never happened, and we have all been paying the price for this inaction ever since. The level of congestion doesn’t just waste people’s time; it also costs the state more than $1 billion in economic activity, hampers job creation, and causes businesses to look elsewhere when relocating. Maryland is known for many great things, but increasingly it is gaining a reputation as a state that can’t get out of its own way when pursuing the big, meaningful projects that can really make a difference in the lives of our residents. The facts are simple. Traffic is back and will only get worse unless action is taken in the very near future. We can wish for things to be different. We can talk about supernatural policies that will remove people from their cars and make mass transit not only profitable but also desirable for most Marylanders—or, we can deal with reality. If we are serious about improving the lives of Marylanders, if we are serious about keeping up with Virginia and other regional powers, then we need to expand our highways and, in the process, expand what is possible for the state we all love.”
—Steven Courtien and Howard Levine, “Opinion: Maryland Can’t Wait for Traffic Relief,” The Washington Post, Feb. 25, 2022

“[M]ayors and urban planners feel obliged to invent more glorious tasks to demonstrate their creativity during political campaigns. Mayors must now have a ‘vision’ rather than simply being competent managers of the capital represented by urban infrastructure and facilities. Urban planners often promote this confusion about mayors’ missions. They pretend that a city is a complex object that must be designed in advance by brilliant specialists. They would then impose their design on the city’s inhabitants, who lack vision and genius.”
—Alain Bertaud, “The Last Utopia: The 15-Minute City,” New Geography, Feb. 5, 2022

“Many activists . . . oppose any climate solution that past polluters might profit from. Thus, the White House advisory committee ruled that carbon capture and storage, nuclear power, and development of carbon markets (all of which are probably essential), could not be counted as ‘benefits.’ Other justice advocates oppose using hydrogen as a fuel, even when it is produced with renewable energy—apparently because it does not conform to their bucolic vision of a wind-and-solar powered world. The administration, to its credit, has pushed back. Yet the prominence it has given to such muddle-headedness has invited trouble.”
—“Environmental Justice in the Balance,” The Economist, Jan. 29, 2022

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The post Surface Transportation News: Most advanced toll lanes, DOT’s unserious supply chain proposal, and more appeared first on Reason Foundation.

• FHWA guidance on highway expansion sparks backlash
• How the new federal bridge program rewards failure
• House committee disappoints on automated vehicle innovation
• Who gets RAISE grants, and why?
• Semantics of mileage-based user fees
• News notes
• Quotable quotes

FHWA Guidance on Highway Expansion Sparks Backlash

Last month’s newsletter article about Federal Highway Administration (FHWA) Acting Administrator Stephanie Pollack’s guidance memo urging state departments of transportation (DOTs) to give the lowest priority to highway capacity expansion (and promising tough environmental reviews if they do select such projects) has stirred up a hornet’s nest. In recent weeks I’ve heard from state transportation officials from red and purple states who are outraged by this attempt to rewrite the formula-funded majority of the bipartisan infrastructure law. The Wall Street Journal published a hard-hitting editorial on Jan. 30, “Highway Funding Bait-and-Switch,” which pointed out that such anti-highway policies were included in the House surface transportation reauthorization bill last summer, but that bill was replaced by the bipartisan Senate bill, which became law.

In addition, a group of 16 Republican governors recently released an open letter to President Joe Biden and the U.S. Department of Transportation, writing, “Excessive consideration of equity, union memberships, or climate as lenses to view suitable projects would be counterproductive. Your administration should not attempt to push a social agenda through hard infrastructure investments and instead should consider economically sound principles that align with state priorities.” A clear example would be “an attempt by the Federal Highway Administration to limit state widening projects, which would be biased against rural states and states with growing populations.” Signers of the letter were mostly from rural states, but Republican governors fast-growing Georgia, South Carolina, Tennessee, and Utah were also among them while other notable fast-growing states with Republican governors—Arizona, Florida, and Texas—did not sign on to the letter.

During her Senate confirmation hearing as Office of Management and Budget (OMB) director last week, Shalanda Young told senators that she was not aware of the FHWA guidance letter and would look into it. Eno Center for Transportation’s Jeff Davis pointed out that most such policy proposals are supposed to be submitted to OMB for review prior to being issued. He also noted that dismayed senators could ask the Government Accountability Office to look into whether the guidance letter is subject to being overturned via the Congressional Review Act. 

What kinds of projects are on tap in fast-growing states? Here is a sampling.

Replacing Bottleneck Interchanges
Each year, the American Trucking Associations releases a list of the 100 most congested interchanges for truck travel—mostly where urban Interstates connect with other major highways. Many of these interchanges handle as much as double the traffic they were designed for many decades ago. Among those in current transportation plans are:

• Florida: The huge Golden Glades interchange in Miami, where I-95, Florida’s Turnpike, the Palmetto Expressway and U.S. 441 all interconnect.
• Georgia: Several major interchanges on the I-285 Perimeter, the ring road around central Atlanta.
• South Carolina: Malfunction Junction (aka the Carolina Corridor), where I-20, I-26,and I-126 intersect. The first phases of this $1.7 billion project are already under way.

These projects would reduce congestion, and hence greenhouse gas emissions, and benefit cars, trucks, and buses alike.

Widening Expressways Overloaded Due to Growth
These widening projects are needed not only in fast-growing Sunbelt states but also in blue states like Illinois where suburban growth has overloaded expressways originally designed for commutes to downtown areas.

• Illinois: The state DOT has large-scale support to rebuild the aging Eisenhower Expressway (I-290), including the addition of express toll lanes and replacement of many structurally deficient bridges.
• North Carolina: Work is under way to complete the planned Outer Loop around I-540 in Raleigh. In this case, the project is being developed using toll finance.
• South Carolina: SCDOT’s 10-year plan includes widening I-85 in Greenville and Spartanburg counties, again due to recent and projected growth.

Bridge Replacements
Many major bridges have outlived their original design lives, and some of these bridges have fewer travel lanes than the highways on either side, meaning the bridge itself has become a bottleneck. These projects include:
Alabama: Replacing the Mobile River Bridge with a higher span to provide improved clearance for cargo vessels passing underneath.
Kentucky: Replacing the obsolete Brent Spence Bridge, to be partly funded by tolls.
Louisiana: Replacing the Calcasieu River Bridge on I-10 with a six-lane toll bridge.
Oregon: Replacing the obsolete I-5 bridge across the Columbia River between Portland and Vancouver, WA.

Missing Links
A number of freeway systems have missing links that were not built for a variety of reasons, including local opposition, but whose absence has led to congestion and emissions in the non-freeway locations. One example is the missing link in Ft. Lauderdale, where the Sawgrass Expressway was supposed to extend several miles further east to connect with I-95. Political support for it has developed as the region has grown, and this project is now in the design phase by Florida DOT.

State DOTs with well-defined needs for projects like these are not going to give up, just because FHWA has implied that it may make their lives difficult. And although projects like these are mostly in red states, there are enough of them in other states to make possible 2023 congressional action to rein in FHWA on its anti-expansion game plan.

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How the New Federal Bridge Program Rewards Failure

In the new bipartisan infrastructure law, Congress included $27.5 billion over five years for bridge repair and replacement. According to the federal bridge inventory, the number of bridges in “poor” condition (structurally deficient) was 43,578 in 2021, down 3.2% from the year before. That’s because some state transportation departments, with support from their legislatures, are taking their bridge conditions seriously. Other states, however, are not. In many cases, the fault lies largely with state legislatures, not DOTs. In other words, as I’ve written before, we don’t really have a national bridge problem: we have a number of state-specific bridge problems.

As Reason Foundation’s Baruch Feigenbaum noted in his incisive analysis of the recent bridge collapse in Pittsburgh, “Pennsylvania is one of five states that reported more than 15% of their bridges to be structurally deficient…the problem isn’t that Pittsburgh lacks the funding to fix bridges. Rather, the problem is the way the city spends so much of its annual budget on other things and chooses to spend so little of its money maintaining its roads and bridges.”

A useful overview from the American Road & Transportation Builders Association (ARTBA) lists the states with the largest fraction of bridges in “poor” condition (as defined by a widely accepted numerical rating system). Here are the 10 worst states, by this measure:

The new Bridge Formula Program (BFP) allocates money to each state via a formula, which is based 75% on the total cost of replacing every bridge rated “poor” in a state and 25% on the total cost of replacing every bridge rated “fair” in that state. In other words, the more that a state has neglected its bridges, in terms of a huge repair backlog, the more the bridge program rewards it. In a well-researched piece for National Review, Dominic Pino ranks all 50 states (plus the District of Columbia and Puerto Rico) on their unit costs of bridge replacement (cost of replacing bridges rated poor divided by the deck area of those bridges), finding that a disproportionate share of the BFP funding will go to high-cost states, such as California, Massachusetts, New Jersey, and Connecticut. California alone is allocated 16% of the total bridge funding. Texas, with relatively low bridge replacement costs and bridges in much better condition, gets far less. Here are the 10 largest allocations of BFP money for FY 2022:

State and local governments own nearly all of America’s bridges. To be sure, most of them could be investing more in proper stewardship of these important assets. But this new $27.5 billion federal bridge program serves as bailout, as Pino notes, that “rewards states that waste more money with more federal aid.” And perhaps worse, every one of those federal dollars comes with costly strings attached, in particular Buy America provisions and Davis-Bacon prevailing wage requirements. Those extra costs do not apply when states use their own highway funds for bridge repair and replacement.

One-time windfalls like this federal bridge program implicitly encourage state legislatures to devote the majority of their highway funds to projects with ribbon-cutting opportunities (generally many small new-capacity projects). Legislators can then try to excuse their neglect of ongoing maintenance by reviewing history—every decade or so, in hopes that some kind of federal bailout comes along that can compensate for their years of neglect.         

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House Committee Disappoints on Automated Vehicle Innovation
By Marc Scribner

On Feb. 2, the House Transportation and Infrastructure (T&I) Committee’s Subcommittee on Highways and Transit held a hearing on “The Road Ahead for Automated Vehicles.” Technology has changed since the last T&I hearing on automated vehicles (AVs) nearly a decade ago, but the members and non-developer witnesses appearing on the panel generally failed to reflect—or at least reflect accurately—the changes in the AV landscape. With Congress out to lunch and an administration at best indifferent to AVs, the near-term prospects for a comprehensive federal automated vehicles policy framework remain slim.

The hearing’s eight witnesses made for an unwieldy proceeding. Only two of them represented developers of the technologies that were the subject of the hearing, with the remaining witnesses representing “stakeholder” interests with various hobby horses and axes to grind. These included two labor union representatives, John Samuelsen of the Transport Workers Union, and Doug Bloch of the Teamsters, who unsurprisingly expressed general opposition to automation. They urged legislators to prioritize the perpetual employment of their dues-paying members over all other considerations, including safety, with Samuelsen bluntly saying, “No level of vehicle automation should ever replace them.”

Samuelsen also made an historical reference that didn’t seem to register with any members in attendance, even though it highlighted the main reason why U.S. transit agencies cannot adopt automation. He mentioned that “the New York City subway ran a fully automated train across Manhattan from 1962 to 1964.” Train automation proved very popular with New Yorkers, but was scuttled largely due to union opposition during a turbulent time for transit in America.

The transit industry was teetering on the edge of bankruptcy in the early 1960s. The federal government sought to finance municipal takeovers of these private companies to preserve transit service in cities. In exchange for the support of powerful transit unions, lawmakers added Section 13(c) to the Urban Mass Transportation Act of 1964. This provided transit unions and their members with iron-clad job protections that exist to this day (49 U.S.C. § 5333(b)).

The inflexibility of Section 13(c) is why it is very difficult for U.S. transit agencies to reduce labor costs in general (see the Biden administration’s rekindling of a dispute over California’s modest 2013 public pension reforms, for example) and functionally impossible through automation, even if automation would improve transit safety, reliability, and access. As a practical matter, unless Section 13(c) is significantly weakened or repealed by Congress, U.S. transit agencies are unlikely to adopt life- and cost-saving automation.

On the other side, Nat Beuse from Aurora brought the perspective of both an AV developer and a former motor vehicle safety regulator. Before entering the automated vehicle industry in 2019, he was a senior official at the National Highway Traffic Safety Administration (NHTSA) for nearly 20 years. Beuse reminded the panel that AVs, like any other motor vehicle, are subject to many federal, state, and local regulations. He also emphasized that Aurora’s AV testing protocols allowed any employee to request a halt to automated vehicle operations, and that the company runs millions of simulations each day before attempting to validate its software on public roads. He urged Congress to ensure that laws and regulations for AVs are technology- and business model-neutral.

The other AV industry representative was Ariel Wolf, who leads the newly renamed Autonomous Vehicle Industry Association. He was clear in drawing an important distinction between advanced driver-assistance systems, such as Tesla Autopilot, and the automated driving systems under development by Wolf’s members. When Rep. Hank Johnson (D-GA) conflated Tesla’s approach with that of the entire industry, Wolf responded, “Tesla is not a member of our association because it’s not an autonomous vehicle. It’s a driver-assistance technology.”

Wolf’s trade association until January was called the Self-Driving Coalition for Safer Streets. Tesla refers to its most advanced automation features as “Full Self-Driving Beta.” Tesla’s approach has been criticized as reckless by those inside and outside the AV industry, and the term “self-driving” has been tainted in the eyes of many.

In questioning Wolf, Rep. Johnson mentioned a recently deployed feature within Full Self-Driving Beta that is designed to allow users the option to slowly roll through all-way-stop intersections under certain low-risk conditions. Technologist Brad Templeton makes a good case for this feature’s existence, but the problem is that rolling stops are illegal in every U.S. jurisdiction. So, Tesla voluntarily agreed in January to disable the rolling stop feature through an over-the-air update.

Tesla ultimately gained nothing through its rolling stop release other than needlessly antagonizing Biden administration officials, who have unfortunately shown much less interest in the large potential safety benefits of AVs than their predecessors in the Trump, Obama, and Bush administrations. In June 2021, NHTSA issued a sweeping Standing General Order requiring all AV developers to report crashes to the agency, which was almost certainly in response to Tesla’s behavior alone. It is no wonder the rest of the AV industry is seeking to distance itself from Tesla.

The four-hour hearing offered disappointingly little in terms of policy substance. For those who have followed federal AV hearings in Congress during the last decade, the overwhelming feeling was one of déjà vu. Outgoing T&I Chair Peter DeFazio (D-OR) correctly noted, “It’s going to be an extraordinary challenge for regulators” if the U.S. is to realize the “whole host of benefits just waiting out there.” But this sentiment has been expressed for years with no action to back it up. States and federal regulators are now charting their own automated vehicle policy paths without any meaningful guidance and oversight from Congress. This isn’t likely to change in 2022, but maybe there is hope in a new Congress in 2023.

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Who Gets RAISE Grants, and Why?
By Baruch Feigenbaum

RAISE is the acronym for a federal grant program, Rebuilding American Infrastructure with Sustainability and Equity. Since the Federal Aid Highway Act of 1956 created the Interstate Highway System and provided federal funding for surface transportation, the majority of funding has been awarded based on complex formulas. Over the last 30 years, leaders of the funding and transportation committees have become very skilled at writing formula funding that benefits their districts and/or states. I was thrilled when the George W. Bush Administration created the Urban Partnership Agreement (UPA) and Congestion Reduction Demonstration (CRD) grants that awarded six projects funding based on quantitative metrics.

Any projects that receive federal transportation discretionary funding should meet the following four basic criteria:

• The project is evaluated based on a cost-benefit analysis.
• The project funds interstate infrastructure.
• The grant funds a transportation project.
• And, the project is not chosen for political reasons.

Unfortunately, discretionary grant programs from the Obama and Trump administrations were often designed more for political and policy reasons. How do the new RAISE grants rate? My intern Mae Baltz and I created a speadsheet heet that included all 763 grant applications. We examined how the 90 projects that were awarded funding differed from the 673 projects that did not receive funding. We categorized each project into national interest or local interest, transportation-related or not transportation-related, and whether or not the project is in a congressional district of members serving on a transportation or funding committee (the House Transportation and Infrastructure, House Ways & Means, Senate Banking, Senate Commerce, Senate Finance, Senate Environment and Public Works) or not in one of those districts. We also examined the federal share of funding and the type of applicant.

As the summary table shows, Reason Foundation fount that of the 90 projects funded with RAISE grants in 2021, only nine projects (10%) were national in nature.

Of the 90 projects funded by RAISE grants, only 50 projects (56%) were related to transportation.

The other projects funded were primarily focused on environmental remediation, economic development, or other factors. Of the projects not selected for the grants, 496 (74%) were related to transportation. 

Reason’s review of the 90 projects funded found that 41% of RAISE grants projects were located in congressional districts represented by members of a transportation or financing committee.

Only 15 of the 90 projects funded (17%) by RAISE grants were projects submitted by state governments. While state governments don’t have the monopoly on good transportation ideas and projects, they do own the vast majority of the nation’s transportation infrastructure, including, most notably, Interstate highways that are in desperate need of reconstruction.

Breakdown of 2021 RAISE Grants

Source: Calculated by Reason Foundation’s Feigenbaum and Baltz using data from RAISE grants website 

Not only did the projects that were funded with RAISE grants seldom meet the four basic criteria above, the projects that were not funded were more likely to meet those four criteria. In other words, the U.S. Department of Transportation was more likely to fund projects that were local, that were not related to transportation, and were located in the district of a politically-connected member of Congress.

What types of projects were funded? I’ve chosen a sampling of questionable projects based on the original intent of the program:

• $21 million to Little Rock, AR, to build a recreational trail to increase tourism and create economic stimulus
• $11 million for a multimodal transit center in Yuma, AZ, where less than 0.5% of commuters (or 1 of every 200) use mass transit
• $17 million to make Washington Street in Denver “livable” by adding streetscaping and energy efficient lighting
• $3 million to Trinidad, CO, to subsidize the La Junta passenger rail line, a line which received $15 million during the TIGER Grants
• $22 million to build recreational trails along the Atlanta BeltLine
• $10 million for New Jersey to revitalize Atlantic City—something the state has been spending money on without success for 40 years
• $25 million for Johnstown, PA to, in the words of the application, “Connect our history to the modern renaissance of art in the Johnstown community”

There were some good projects funded. South Dakota, for example, received $22 million for a freight rail expansion project and Bangor, ME, received $2 million to improve the I-95/SR 15 interchange. But there were almost as many projects studying the removal of Interstate highways as projects that improved highways.

The last three presidential administrations have shown that the executive branch frequently does not allocate discretionary federal grants to their highest and best uses. A program originally intended to improve mobility is getting further and further away from its purpose.

Going forward, the Congressional Budget Office and Congressional Research Service need to investigate where and how these discretionary grants are being awarded. And members of Congress need to use oversight power more effectively to determine why the executive branch is directing this taxpayer funding to non-transportation projects and why so much of it ends up in the districts of members on transportation and/or finance committees. 

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Semantics of Mileage-Based User Fees

Last month, the Government Accountability Office published an overview of the ongoing federal program that assists state transportation departments (and sometimes coalition of state DOTs) to test and evaluate ways of charging highway users by the mile instead of by a tax on gallons of motor fuel used. It’s GAO-22-104299, released last month.

For someone wanting to get up-to-speed on which states and coalitions have carried out pilot projects, the different methods they have tried out, and what they have learned, the report is an excellent overview. For example, I learned that only 11 of the 50 states have not either carried out a pilot project or been part of a multi-state coalition without directly operating such a program itself. The also-rans are Arkansas, Kentucky, Louisiana, Mississippi, and West Virginia in the South plus Illinois, Iowa, Indiana, Michigan, South Dakota, and Wisconsin in the Midwest.

The report also includes some researchers’ speculations about addressing equity by having mileage fees that are somewhat proportional to income (which has never been seen as a need with per-gallon gas taxes) or that differ between urban and rural drivers, even though the latter have been found in study after study to be made better off in a shift from gas taxes to MBUFs, since rural users on average drive older and lower-mpg vehicles.

But my biggest concern is the language used in the section discussing privacy. At several points in that discussion, the text refers to GPS systems “tracking” people’s miles driven as the main privacy concern of motorists. Mass media have carelessly used that word, too. And even the academics at the Mineta Transportation Institute, in their public opinion surveys about mileage-based user fees, describe them as a system that would track their miles driven.

That wording reflects the widespread misunderstanding of what GPS is and does. The GPS in a device plugged into the on-board diagnositics port under your dashboard tells you where you are at any time. It does not tell this to anyone else—unless it is connected to a communications device to send that information elsewhere. In most mileage-based user-fee pilot programs, the mileage total is recorded by the device. That total can be reported to a designated service provider if and only if you agree to that being done. And that reporting can be as infrequent as once a month, reporting the total miles driven, not the details of when and where. In some situations (e.g., if you often travel across a state border), it may be necessary to record totals separately for each state—something that is being worked out between several western states in one of the multi-state pilots.

Recording and then reporting mileage totals is not “tracking” in the sense people imagine when they hear the term. They are likely to think something like, ‘big brother is in my car.’ That term tracking often fuels the privacy concerns that are probably the single most important obstacle to gaining public support for the needed shift from per-gallon taxes to per-mile charges. Everyone involved with efforts to bring about this change should remove the word “tracking” from their vocabulary when writing and talking about mileage-based user fees.

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News Notes

Mississippi River Bridge in Baton Rouge to be P3 Project
Louisiana Gov. John Bel Edwards has endorsed using a long-term public-private partnership (P3) to finance, develop, and operate a $900 million new bridge across the Mississippi in Baton Rouge. It would supplement existing bridges, including one on I-10, relieving major traffic congestion in that metro area. The governor proposed using up to $500 million in surplus state funds to cover half or more of the estimated cost of building the bridge. Louisiana Transportation Secretary Shawn Wilson is planning to begin the process via a pre-development agreement that would augment the needed environmental study.

First Kansas Express Toll Lanes Moving Forward
December 2021 saw the release of the environmental assessment of the planned addition of express toll lanes to 10 miles of U.S. 69 through Overland Park, Kansas. The study found minor impacts to wetlands plus increased noise exposure, calling for noise walls along certain stretches. The study was conducted jointly by the Kansas DOT and FHWA. The comment period closed on Jan. 22. Construction is expected to begin in mid-2022, with the toll lanes opening by 2025.

Sticker Shock Over Caltrain Electrification Estimate
Caltrain is the commuter rail line that connects Silicon Valley to downtown San Francisco. The agency announced that its latest cost estimate to electrify this line (replacing diesel locomotives) has increased to $2.44 billion. That sum covers 52 miles from San Jose to San Francisco. The increase results from an agreement with contractor Balfour Beatty to settle increased costs due to commercial issues and a schedule change. The project is aiming to be completed by Sept. 2024.

Brightline Hopes to Start Los Angeles to Las Vegas Line by End of Year
The Las Vegas Review-Journal reported that Brightline expects to break ground on the route between Las Vegas and Rancho Cucamonga by the end of 2022. Over the past year, Brightline has reached a right of way agreement to run the line alongside I-15 for most of the way, where it will terminate at a planned new station in Cucamonga, where passengers can connect to an existing commuter rail line. The 260-mile Las Vegas to Los Angeles trip is estimated to take 3 hours, an average speed of 87 mph. The current cost estimate is $8 billion, but no details of the planned financing have been announced.

TuSimple Expands Autonomous Trucking Operations in Texas
The autonomous trucking company announced an agreement with commercial developer Hillwood for a million square foot facility in Hillwood’s planned 27,000 acre AllianceTexas development. The facility is intended to be a depot for Level 4 autonomous trucks. The location is just off I-35, near Ft. Worth’s Alliance Airport and facilities of TuSimple’s main freight partners, UPS and DHL.

New I-5 Bridge Between Oregon and Washington Moving Forward
Discussions are under way on both sides of the Columbia River in the latest attempt to replace the aging and obsolete I-5 bridge. The I-5 Bridge Replacement Program staff are doing workshops with citizens, reviewing design alternatives such as two separate bridges (northbound and southbound) or a single double-deck bridge. Tolling appears to be a given, to cover a portion of the estimated $4.8 billion price tag. The current plan is to begin tolling as early as 2025, long before the new bridge is constructed.

Miami Causeway Project May Be Revived as a P3
The Miami-Dade County Commission voted to cancel the current request for proposals and start over on a potential P3 to modernize and enhance the Rickenbacker Causeway linking Miami with affluent Key Biscayne. A consultant value-for-money analysis found that a design-build-finance-operate-maintain (DBFOM) public-privage partnership would “minimize the county’s financial risks and financial obligations.” The next step is to seek a consultant for a project development & environmental (PD&E) study of the project, for which the county will be seeking partial federal funding. Once the project has been designed, the county would be prepared to resume a P3 procurement process.

Kansas Turnpike to Go Cashless by 2024
The Kansas Turnpike Authority is moving forward with replacing transponder-only lanes at toll plazas with full overhead gantries for all-electronic tolling. Those without transponders (called KTags) will be billed based on their license plate numbers. CEO Steve Hewitt told KVOE News last month that cashless tolling will go live up and down the highway at the same time in 2024.

$118 Billion Additional Bailout of the Highway Trust Fund
In a little-noted provision of the bipartisan infrastructure law, Congress approved borrowing another $118 billion to cover the projected shortfalls in the federal Highway Trust Fund over the next five years. Thus, users of all federal-aid highways will be paying an even smaller share than before in highway user taxes that were originally the sole funding source for the federal highway program. Users-pay/users benefit continues to morph toward taxpayers pay, highway and transit users benefit. Prior to this new bailout, since 2008 Congress had bailed out the HTF to the tune of $270 billion.

Walmart and FedEx Go All-in for Electric Delivery Fleets
GM electric truck division BrightDrop had an excellent January. Its first customer, FedEx, increased its original order for 500 delivery vehicles to 2,500. And Walmart topped that with a first-time commitment to purchase 5,000 electric delivery vans. BrightDrop’s first actual deliveries took place in December: five electric delivery vans for FedEx. BrightDrop estimates that these vehicles will save owners $7,000 per year in operating and maintenance costs, compared with internal combustion engine vans.

Alternative Proposal for LaGuardia Airport Rail Line
AmeriStar Rail (ASR), a startup company, has made an unsolicited proposal to New York state for an alternative to the currently planned two-link rail service from Manhattan to LaGuardia. Last Octover, the Port Authority suspended work on the FAA-approved Airtrain plan, which has local opposition, to give the new governor, Kathleen Hochul, time to review the plan. Last year ASR made an unsolicited proposal to take over Amtrak’s Northeast Corridor operations.

Kansas Studying Mileage-Based User Fees
Kansas DOT Secretary Julie Lorenz told the Topeka Capital-Journal that the expected long-term decline in fuel tax revenues will require eventually replacing fuel taxes with per-mile charges. Interestingly, she suggested that it may be best to have drivers on busy, congested highways pay a higher rate than those on local and rural roads, suggesting that we should be “thinking about transportation as a utility.”

St. Louis Faces Trolley Problem
What if you accept federal money to build a streetcar and then shut it down as not worth the money? That’s what St. Louis faces, with its federally-subsidized streetcar that’s been offline since Dec. 2019. But federal law requires that transit grant money be repaid if the project is not in operation. See Christian Britschgi’s report, “St. Louis Taxpayers Paid a Lot to Run a Money-Losing Streetcar. It Could Cost Them Even More to Shut It Down,” on Reason.com.

Michigan Proceeding with One-Mile of EV-Charging Road
Michigan has awarded a $1.9 million contract to Electreon to design and test-operate dynamic and stationary electric vehicle charging via a system embedded in up to one mile of roadway. It is billed as the first “electric road system” in the United States, according to a news release from Gov. Gretchen Whitmer’s office.

Pennsylvania Diverted $4.2 Billion from Bridges to State Police
Instead of devoting its highway user taxes to roads and bridges, a 2019 audit found that $4.2 billion had been diverted to funding the state police. Reason.com’s Eric Boehm provides more details.

“Better Infrastructure Spending Needs Better Institutions”
A recent op-ed by Emil Frankel, a former state transportation director and senior official at U.S. DOT, makes a good case for methods and procedures to be in place at both state and federal levels of government, to ensure that projects selected for new federal funding are actually sound investments.

Overcoming Opposition to New Tolling
In a new one-pager aimed at public officials, I have suggested ways to address four main concerns about new tolling often raised by highway user groups.

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Quotable Quotes

“I was one of those who was part of the bipartisan negotiating team that put together the infrastructure bill. Our largest single investment was in highways. You can imagine our surprise when we see the Department of Transportation indicating that highway money can’t be used for increasing the capacity of highways. This direction flies in the face of our intent, and our needs. I recognize that there are some states that aren’t growing and may not need additional capacity—New York, New Jersey, Delaware, Rhode Island, and so forth. But there are other states that are growing fast—South Carolina, Florida, my state of Utah, fastest-growing state in the nation over the last decade. We need to increase the capacity of our highways or we’re gonna not see the economic growth which we projected as being part of this bill.”
—Sen. Mitt Romney (R-UT), in Jeff Davis’ “OMB Nominee Declines to Endorse New FHWA Policy Guidance,” Eno Center for Transportation, Feb. 3, 2022

“There are no transit routes now across the American Legion Bridge. This project will really change that, enabling our transit system to connect Maryland residents to Tysons or Virginia jobs, and vice versa. . . . This can be game-changing. In Virginia, there was no incentive to ever take a bus, because you sat in the same traffic as everybody else. Bus trips and carpooling in the Virginia express lanes have increased over 105 percent, on average, across the network since opening. I think the Virginia system has been able to show some of the naysayers how an express lanes network can fit into the broader transportation solution. Also we have pledged $300 million in transit services over the life of the Maryland project, to ensure transit is a core part of this project.”
—Pierce Coffee, in Katherine Shaver’s “Transurban Leader Calls Maryland’s Beltway, I-270 Toll Lanes ‘Transformative,’” The Washington Post, Dec. 30, 2021 

“Over even a medium-term time frame, the increasing adoption of hybrid, electric, and autonomous vehicles will almost completely sever the connection between VMT and greenhouse gases. Those who are attempting to redesign cities, projects that will take decades or even centuries, merely to reduce the use of gasoline-powered cars, are thus engaged in a futile exercise that will only become more futile with time. It would be like trying to redesign cities in 1900 to reduce horse manure. The technology will change faster than the city will.”
—Judge Glock, “Sprawl Is Good: The Environmental Case for Suburbia,” Breakthrough Journal, Winter 2022

“Rarely in American history have states been in less need of federal aid. But they’re going to be getting more as portions of the $1.1 trillion bipartisan infrastructure law continue to roll out. The Bridge Formula Program is only one of many programs in the bill that will send money to states to fund the infrastructure they own and maintain—infrastructure they should be incentivized to fund on their own. Instead, inefficiency gets you more federal funding, while efficiency goes unrewarded.
—Dominic Pino, “The Bipartisan Blue-State Bridge Bailout,” National Review, Jan. 22, 2022

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The post Surface Transportation News: Backlash to highway guidance, new federal bridge program, and more appeared first on Reason Foundation.

• FHWA vs. the bipartisan infrastructure law
• Beware the “induced demand” calculator
• Amtrak expansion and freight rail
• Traffic congestion is back, INRIX documents
• Mobile River toll bridge back in play
• Automated big rigs hauling freight
• News Notes
• Quotable Quotes

FHWA Versus the Bipartisan Infrastructure Law

Anti-highway and “smart growth” organizations lobbied hard for any new federal transportation infrastructure law to focus on “fixing it first” when it comes to highways, for expanding transit and passenger rail funding more than highway funding, and for interpreting highway safety mostly as protecting bicyclists and pedestrians using the roads. These groups would have cheered if the House version of the surface transportation reauthorization bill had passed, but it got dropped because it had no chance of passing in the Senate. Instead, the House eventually agreed to the Senate-generated Infrastructure Investment and Jobs Act (IIJA), which became commonly referred to as the bipartisan infrastructure law (BIL).

The BIL includes a relatively traditional five-year reauthorization of the federal highway and transit program (albeit with larger-than-usual increases for transit and Amtrak). The anti-highway folks consoled themselves with the law’s large increase in the number and funding of discretionary programs, which enable U.S. Department of Transportation (US DOT) to define the criteria for projects it likes—which turn out to be anti-highway, fix it first, more transit, and an emphasis on bicycling and walking. That caused shockwaves at state transportation departments and at AASHTO, their association. As David Harrison reported in The Wall Street Journal (Nov. 7), AASHTO Executive Director Jim Tymon said, “We’ve never seen anything on this scale before . . . the number and scale of discretionary programs. .  . [They] are going to allow the administration to pick the projects that really fit their policy lens.”

But then the other shoe dropped. On Dec. 16, Federal Highway Administration (FHWA) Acting Administrator Stephanie Pollack released a six-page guidance memo on how state DOTs should interpret the enlarged formula-funded programs. In effect the memo said, we advise you to interpret the formula programs as if they were based on “fix it first” principles, and that state DOTs should make sure to allocate some of their funds to local and tribal governments to fix their streets and roads, too. They should “prioritize projects that move people and freight by increasing the efficiency of existing roads and highways over projects that expand the general purpose capacity of roads and highways”—something that is nowhere in the bipartisan infrastructure law. The memo also reminds state DOTs that projects that add capacity for walking and biking generally get a free ride from National Environmental Policy Act (NEPA) regulations, unlike projects that add highway capacity (hint, hint).

A state DOT director sent me a memo prepared by the AASHTO board (and sent to all state DOTs before Christmas) raising a number of questions about this unprecedented FHWA “guidance.” The memo reminds recipients that the actual bipartisan infrastructure law “provides state DOTs with full flexibility in how investment decisions are made. The FHWA memo can be read to suggest that FHWA has the authority to require states to invest Federal funds in certain types of projects and the authority to restrict them from investing in other types of projects.” That is decidedly not so. AASHTO will be developing a formal reply to FHWA and is seeking inputs from its member DOTs.

Not mentioned anywhere in the AASHTO documents I’ve seen—and this is solely my own view—is that the combination of this “guidance” memo and the huge expansion of discretionary programs hands FHWA a powerful tool for intimidation. It can basically convey to state DOTs the following: ‘If you guys want to have any chance of capturing some of the vast new sums of discretionary grant money, maybe you’d better allocate your formula funds in accordance with our guidance.’

This is clearly not what Congress intended. The actual law that was passed by both houses is bipartisan and represents a carefully worked-out consensus in the Senate, which the House eventually agreed to. The Senators who forged this bipartisan law should rein in what appears to be FHWA running amuck, as if something like the discarded House bill had been enacted. FHWA should comply with the law as written and rescind this intrusive “guidance.”

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Beware the “Induced Demand” Calculator
By Baruch Feigenbaum

Recently, the Rocky Mountain Institute (RMI) created the State Highway Induced Frequency of Travel (SHIFT) calculator that purports to measure long-run induced vehicle miles traveled and emissions impacts from capacity expansions in urban areas. The calculator uses lane miles and vehicle miles traveled (VMT) data from FHWA. It was modeled on a calculator the group created for Colorado.

Unfortunately, the calculator makes questionable assumptions, has major limitations and calculates induced demand incorrectly. Its real goal seems to be to prevent the construction of any new urban roadway miles.

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.

Second, new roadway capacity has safety benefits. Many suburban roadways are widened from narrow, curvy two-lane roads to four-lane divided highways, partly for better mobility but also for increased safety.

Third, new roadway capacity can reduce greenhouse gas emissions if it allows free-flowing traffic to replace stop-and-go traffic (free-flowing traffic generates less greenhouse gas emissions).

The calculator has other limitations. It examines principal arterials (including Interstates and other freeways) only. That’s not ideal because widening a collector may impact a parallel arterial. But since the calculator does not have data for the collector, it would be unable to explain how a widened arterial might decrease travel on the collector. The diversion of traffic from a more-local to a more-regional highway would be considered a positive by most neighborhood groups. And the calculator is unable to analyze rural areas. While induced travel is a bigger problem in urban areas, it also exists in some rural locations.

Further, the calculator fails to differentiate between priced and non-priced capacity. Adding variably-priced express toll lanes to an Interstate has been proven to reduce induced demand compared with adding general purpose lanes. Further, express toll lanes encourage solo commuters to switch to vanpools or buses, a policy that opponents of new VMT should want to encourage.
 
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 at any given point is induced demand. I’ll use the proposed addition of two express toll lanes in each direction to I-35 in Austin, Texas, to illustrate the point. Anti-roadway groups label five types of roadway travel as induced demand. (A more in-depth commentary on induced demand by Arizona State University professor Steve Polzin is available here).

The first type is demand attributed to growth in population, employment, or activity. I-35, which has not been widened in more than 30 years, is much narrower than similar Interstates in Texas’ other major metro areas: Houston, Dallas-Fort Worth, and San Antonio. Between 2010 and 2020, Austin’s population increased by 34%. TxDOT has proposed widening I-35 to accommodate that new growth, not create new demand.

The second type is demand associated with redistributing existing travelers. Let’s assume that TxDOT is able to widen I-35 as planned, and some traffic switches from Loop 1 (aka the Mopac expressway) to the I-35 express lanes to travel from downtown to Round Rock. Those vehicles switching highways do so because I-35 is closer to their origin and destination. In fact, using I-35 leads to fewer vehicle miles traveled and fewer greenhouse gas emissions.

The third type is demand associated with travelers changing their commute times. For example, let’s say that a commuter would prefer to leave work at 5:30 pm local time, but chooses to wait until 6:30 pm due to traffic congestion. With the new variably-priced toll lanes, she chooses to leave at 5:30 pm and is able to cook dinner instead of ordering take-out. Switching the time of her travel does not increase VMT. In fact, the ability to cook at home instead of ordering take-out reduces overall VMT.

The fourth type is demand associated with shifting from alternative modes and the fifth type is demand associated with new trip generation. Both of these types can be induced demand.

When I entered each of the five scenarios into the RMI induced demand calculator, the calculator indicated that each one would induce the same amount of travel. They would each create 801 to 1,201 million new VMT per year, burn 53 million more gallons of gasoline, and create 6.4-12.3 million more metric tons of carbon dioxide. Yet the increase in population, changes in travel routes, and changes in travel times are not inducing any new travel. Shifting alternative modes induces some new travel while the new trip generation is the only scenario that induces significant new demand. The calculator should produce at least three (and ideally five) different sets of numbers for the five scenarios but it produces only one set. Since the calculator makes so many assumptions, it functions as a black box using faulty inputs. A simpler description of how it works might, unfortunately, be—garbage in, garbage out.

To its credit, RMI noted that the calculator is “…(B)est used to understand order-of-magnitude impacts, rather than precise, project-specific outcomes.” Unfortunately, that did not stop some of RMI’s partners from making unsubstantiated claims. Streetsblog claimed, “A groundbreaking new calculator gives advocates the tools they need to instantly show the real impacts of proposed highway expansions in their communities — and the experts behind the project hope that transportation agencies will someday be required to use it, too.” 

For highway users, Streetsblog’s comments show that some groups are likely to use this faulty tool to try to prevent state transportation departments from building any new urban highway capacity. Project experts need to explain the flaws and limitations of this calculator so that transportation agencies are not hoodwinked into using this flawed tool.

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What Does Amtrak’s BIL Windfall Mean for Freight Rail?
By Marc Scribner

November’s enactment of the $1.2 trillion bipartisan infrastructure law (BIL) was unprecedented in many ways, as was discussed in detail in last month’s issue of this newsletter. Perhaps the biggest winner was struggling intercity passenger railroad Amtrak, which currently serves less than 0.1% of person trips in the U.S. As Jeff Davis of the Eno Center for Transportation pointed out, the $66 billion in BIL intercity passenger rail funding is equivalent “to the total amount appropriated by Congress for the Federal Railroad Administration (including all pass-through grants to Amtrak) for fiscal years 2004 through 2021, inclusive of the [Obama administration’s] ARRA stimulus and all the recent COVID aid.”

Much attention has been given to the unique opportunity for Amtrak to finally address long-standing infrastructure needs along its principal Northeast corridor, for which it will receive $30 billion of that $66 billion in total rail spending. But what Amtrak chooses to do—and what regulators allow it to do—outside the Northeast corridor may have the biggest societal impacts due to the potential for negative interactions with freight railroads.

The BIL appropriated $16 billion for Amtrak’s national network, which operates on tracks owned by host freight railroads. These routes are heavily subsidized by state and federal taxpayers and carry a vanishingly small share of America’s passenger traffic. But because this 20,000-plus-mile network snakes through 46 states, it can always count on majority support among the 100 U.S. Senators—the primary “customers” of Amtrak’s national network.

In the May issue of this newsletter (“The Coming Conflict Between Freight Rail and Amtrak Expansion,” May 12), I discussed an ongoing dispute between Amtrak and freight carriers CSX and Norfolk Southern between Mobile, Alabama, and New Orleans. Amtrak suspended Gulf Coast service after Hurricane Katrina washed away much of the track in 2005. Restoring service without negatively impacting freight traffic has been estimated to be extremely costly, with a mid-range estimated cost to freight railroads (commissioned by the Florida DOT and conducted by HNTB) coming in at $1.2 to $1.3 billion in 2018 dollars.

In 2020, CSX, Norfolk Southern, and Amtrak agreed to jointly commission a new Rail Traffic Controller (RTC) modeling study from HDR that was supposed to be completed by December of that year. But when HDR encountered a software problem that delayed its final analysis, Amtrak unexpectedly pulled out of the study and in March 2021 petitioned the Surface Transportation Board (STB) to compel the freight carriers to grant Amtrak access to their facilities so passenger rail service could be restarted in 2022. The railroads, freight customers, and passenger railfans have been battling before the Board ever since. In November, the STB granted Amtrak access to CSX’s Choctaw Yard in Mobile for planning purposes, but a hearing has yet to be scheduled on Amtrak’s service restoration petition, casting doubt on Amtrak’s ability to restart Gulf Coast service in 2022 even if it prevails.

The Gulf Coast dispute between Amtrak and host freight railroads is viewed as a bellwether case in Amtrak’s goal of launching dozens of new passenger routes on freight tracks across the country. Amtrak has a strong ally in the Biden administration, which has committed to “sparking the second great railroad revolution.” While certainly not pocket change, $66 billion in federal intercity rail spending over five years is less than what private freight railroads invest in their networks with their own funds. This suggests that whatever happens with the $16 billion in Amtrak national network taxpayer subsidies will be neither great nor revolutionary.

Wasteful transportation expenditures are hardly unique to passenger rail generally or Amtrak specifically. But what makes this move by Congress especially concerning is the potential for inefficient Amtrak trains to displace efficient freight trains. Under federal law, Amtrak has legal priority over freight trains on the freight carriers’ own tracks. Due to the differences between freight and passenger trains—namely speed and length—increasing passenger train density on freight tracks will cause significant disruptions to freight rail operations. Rail shippers in the Gulf Coast have understandably sounded the alarm to the STB that restarting Amtrak service without additional infrastructure capacity would negatively impact their businesses.

Faced with less-reliable freight rail service, some shippers would shift their traffic to trucks. And herein lies the Biden administration’s rail policy dilemma: trucks produce about 10 times as much carbon dioxide per ton-mile as freight trains in the U.S., according to 2021 documentation from the Environmental Protection Agency. Pushing even a small share of freight rail traffic onto the highways would increase the transportation sector’s emissions intensity and undermine the Biden administration’s professed interest in greening transportation. Subsidizing unpopular Amtrak service is not only a bad deal for taxpayers; it’s bad for the planet.

We’ve been lonely in warning about the Biden administration’s contradictory rail policy agenda for some time, but the mainstream political press may be taking notice. A recent editorial from the Bloomberg Opinion Editorial Board harshly criticized Amtrak’s expansionist agenda (“Don’t Add to Amtrak’s Boondoggles,” Dec. 29). The Bloomberg editors rightly conclude, “Even on optimistic assumptions, a decades-long expansion of passenger rail is a grossly inefficient way to fight climate change.”

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Traffic Congestion Is Back, INRIX Finds

In December traffic data firm INRIX released its 2021 INRIX Global Traffic Scorecard. It reports congestion data for the top 25 U.S. metro areas, the top 25 European metro areas, and the top 10 cities in the United Kingdom and in Germany. Also included are data on the 25 worst corridors in the United States and the 10 worst corridors in the U.K. and in Germany.

One of the most striking findings is that only four U.S. metro areas make it onto the table of the world’s 25 most-congested ones: New York (5th), Chicago (6th), Philadelphia (13th), and Boston (18th). The non-U.S. metro areas in that top 10 are London (1st), Paris (2nd), Brussels (3rd), Rome (7th), Bogota (8th), Palermo (9th), and Istanbul (10th). What is common to all 10 most-congested metro areas? All are what can be called legacy transit cities, with a concentration of jobs in the traditional central business district and well-developed rail transit systems. This is the model we are told is “smart” growth (high density of jobs and residents, ample mass transit)—yet these are the world’s most congested metro areas.

Here’s another interesting result. Comparing the tables of the 25 most-congested metro areas in Europe with the 25 most-congested U.S. metro areas, in Europe the average per-commuter delay ranges from 148 hours per year in London to 65 hours in Berlin. By contrast, the U.S. average delay per commuter ranges from 102 hours (New York) to just 21 (Phoenix). And the average delay for the 25 European cities is 94 hours compared with 51 hours in America’s top 25. What brings down the U.S. average are the much lower delay totals for lower-density, suburban metro areas such as Houston (58 hours), Atlanta (53), Dallas (44), Denver (40), Austin (32), Las Vegas (28), and Phoenix (21). In other words, the very model denounced as “suburban sprawl” seems to result in decidedly lower congestion than in high-density, transit-rich metro areas.

One of the reasons for the lower congestion levels in suburbanized metro areas is the suburbanization of jobs that has followed the suburbanization of housing over the past 70 years in the United States. The freeway and tollway networks that have been created to serve these growing areas are an effort to connect anywhere to anywhere via multimodal (car, bus, and truck) roadway networks.

The INRIX analysts collect billions of anonymous data points each day from mobile devices, navigation devices, connected vehicles, fleet vehicles, and road and garage infrastructure, covering all roads. Thus, it is well suited to cover the trips being made from anywhere to anywhere in every metro area surveyed.

To be sure, in nearly all the metro areas covered in this report, traffic levels and delay hours in 2021 were lower than in 2019, since all areas were recovering from pandemic-induced working from home and shifts away from transit to cars. By December 2022 we will be in a better position to assess how much traffic and congestion have returned to “normal.”

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I-10 Tolled Mobile River Bridge Project Revived

More than a year after the metropolitan planning organizations (MPOs) of the counties on either side of the Mobile River in Alabama gave in to anti-toll sentiment, killing the original $2.1 billion toll-financed public-private partnership plan to replace the aging Mobile River Bridge and the parallel Bayway causeway, both MPOs voted last month to revive the original project.

Many months of debate, as well as discussions with Alabama DOT, led the MPOs to conclude that while the original fully toll-finance project was too ambitious (and was estimated to have required passenger car tolls of $3 to $6), the prospect of losing a $125 million federal Infrastructure for Rebuilding America (INFRA) Grant, opposition from the trucking industry to a scheme that would have tolled only trucks, and the drawbacks of first doing only a replacement bridge with the other needed improvements stretched out over 25 years all led to a serious rethinking. As a result, both the Eastern Shore MPO and the Mobile MPO voted on December 15 to endorse a comprehensive solution, but with tolls to be charged only on the replacement bridge. Other crossings of the river—especially the Bayway—must remain non-tolled for passenger vehicles. The existing $125 million federal INFRA grant (which would have expired in September 2022 unless the project was moving toward construction) must be used, and the state must put in at least $250 million. Moreover, the project must be owned by the state, not by any U.S. or foreign private company.

This is good news for east-west mobility in Alabama and Florida, as well as being an important step toward rebuilding and modernizing aging I-10. And assuming ALDOT agrees to these conditions, the project could return to the original concept of being a toll-financed P3. Under such design/build/finance/operate/maintain (DBFOM) agreements, the state remains the owner of the infrastructure, but the P3 firm has ongoing stewardship responsibilities to operate and maintain the project for the life of the long-term agreement.

Two points about the tolling provisions will need further analysis to ensure a financeable project. First, an investment-grade traffic and revenue study will be required, including estimates of truck toll revenue and of diversions by passenger vehicles to non-tolled alternatives. That will determine how much additional state funding may be required to make the project viable.

Second, the MPOs’ provision that the tolls expire as soon as the original debt has been paid off should be open to serious discussion. Assuming 30-year toll revenue bonds, if issued in 2025 they would be paid off in 2055. By that point, electric vehicles might have become 40-50% of all personal vehicles and a smaller fraction of trucks, and ever-higher federal mpg requirements will have further reduced gasoline and diesel consumption—and hence state fuel tax revenue. Alabama will need a new highway funding source by that point, and the bridge will still have operating and maintenance costs. The bridge will have had a replacement funding source in place for three decades. What sense would it make to throw it away at that point in time?

Incidentally, a poll of 455 registered voters in Mobile and Baldwin Counties, conducted after the MPOs’ December 15 decision, found that 75% supported the new framework for the Mobile River Bridge and Bayway. The poll was commissioned by the nonprofit Coastal Alabama Partnership.

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Automated Class 8 Trucks Are Delivering Real Freight

Recent months have seen a growing number of announcements of planned and under-way examples of big-rig trucks hauling commercial freight for mainstream trucking companies in Texas. These trucks are equipped with SAE Level 4 automation, which means they can operate without a safety driver on specific types of roadways (e.g., limited-access Interstates) and in certain types of weather (e.g., not yet in snow and ice).

Last summer J. B. Hunt announced plans to test Class 8 trucks using Waymo automation to haul freight between Houston and Fort Worth along I-45. Embark Trucks, which automates existing trucks which it uses to haul freight, announced plans to serve a route between Houston and San Antonio, presumably along I-10. The company has been working with Texas A&M University to test its autonomous capabilities before putting them into service on public roads. Aurora, another developer of truck automation, plans to operate a subscription-based freight hauling system with Uber Freight. That service launched in December between Dallas and Houston. Uber Freight’s local partners handle the last-mile portions of these trips. In the shorter-haul sector, Gatik opened an autonomous trucking hub in Fort Worth for its 20 ft. and 24-ft. Level 4 box trucks, which make “middle-mile” delivery runs from warehouses to retailers.

I have increasingly come to see freight hauling as the most likely initial success for vehicle automation, because there are clear economic benefits. Once safety regulators are comfortable with omitting the onboard safety driver, a 600-mile run that currently takes 22 hours for a driver to complete manually (due to mandatory non-driving time under federal Hours of Service regulation) could be accomplished in 12 hours. That’s a major cost-saving. (Without a driver on board, if the automation encounters a situation it cannot handle, a fail-safe system must be able to slow and stop the truck out of traffic lanes and call for help.)

Another promising approach may be truck platooning, in which only the lead truck has a human driver, with several others trailing behind without drivers, under control of the lead truck’s automation. One of the pioneers in this approach is Locomation, which last June announced an eight-year agreement with flatbed carrier PGT Trucking. Under the agreement, Locomation will deploy 1,000 autonomous relay convoy (ARC) systems on more than 30 of PGT’s routes.

As with robotaxis and automated air taxis, these are still early days for truck automation. But major truck original equipment makers (OEMs) are nearly all investing in automation platforms, as Daimler is currently doing with Waymo. They see the potential for increased trucking productivity which Level 4 automation can bring about.

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News Notes

Virginia Considers Adding Missing Link to Beltway Express Lanes
Over the past 20 years, Virginia DOT has used long-term, revenue-risk DBFOM P3s to build a network of express toll lanes in the Virginia suburbs of Washington, DC. The network includes most of the I-495 Beltway—but not all of it. In December VDOT launched an environmental study of closing that 11-mile gap (between I-95 and the Woodrow Wilson Bridge to the east). Counting both operational express lanes and others already under construction, the network will reach 90 route-miles by the end of 2022. VDOT will consider using another P3 for the 11-mile addition, assuming the new study shows it to be feasible.

Recharge an Electric Vehicle in Five Minutes?
A new kind of cable for charging electric vehicles (EVs) is under development by engineers at Purdue University, with patent protection pending. The problem with fast charging today is the heat generated by energy traversing the cable. The Purdue invention uses a new way to cool the charging cable that reportedly can deliver a current 4.6 times that of the fastest existing chargers. If this pans out, it could lead to fast charging in as little as five minutes. The research is part of a joint Purdue/Ford Motor Co. R&D program. The Purdue news release notes that, as of November, the prototype had not yet been tested on EVs. But laboratory tests show that it can handle a current of more than 2,400 amps—far more than the 520 amps delivered by today’s fastest chargers. If this proves to be both feasible and affordable, it could dramatically change EV charging.

P3 Express Toll Lanes Get BBB Ratings
Fitch Ratings has upgraded its ratings of the financing used by LBJ Infrastructure Group for the express toll lanes P3 project on the LBJ Freeway in Dallas. Senior secured notes, Private Activity Bonds, and the project’s TIFIA loan were all upgraded from BBB- to BBB. Fitch noted that “the facility has recovered from the pandemic broadly in line with Fitch’s projections,” and that “above-average population and employment growth is expected to drive traffic growth at solid levels over the long term.” The $2.6 billion project added up to three express toll lanes each way to what had been a highly congested stretch of I-635 in Dallas, using an innovative design that did not widen the freeway’s footprint.

$2.5 Billion Tunnels Project in Melbourne
As part of an $8.35 billion P3 project called the North East Link, a construction consortium (Spark) headed by Webuild and John Laing Investors was recently awarded a $2.48 billion contract to build twin 3-lane tunnels 6.5 km in length, reports World Highways. Spark will also hold a 7.5% stake in the P3 company that will operate and maintain the North East Link project once it is completed. The overall project fills in a missing link in Melbourne’s freeway network between the M80 and the Eastern Freeway.

India Continues Highway Asset Recycling
The National Highway Authority of India (NHAI) announced plans to raise $400 million via a new Infrastructure Investment Trust announced last month. Either two or three existing highways will be up for monetization in 2022. In its 2021 monetization, NHAI offered a set of five operating toll roads totaling 390 km in the states of Gujarat, Karnataka, Rajasthan, and Telangana, with lease terms of 30 years for each tollway. Investors in that round included Canada Pension Plan Investment Board and Ontario Teachers’ Pension plan, each holding 25% of the investment trust. Other investors include insurance companies, banks, and other financial institutions. That monetization yielded $675 million.

Millennials Power Housing Market
Despite a later start in going from renting to owning, the millennial generation is now the largest participant in home-purchase loans, according to a front-page Wall Street Journal article on December 15. The pandemic and the expansion of remote work appear to be factors motivating the shift to home ownership by this generation. The article cites CoreLogic data showing that millennials in 2021 accounted for 67% of first-time home purchase loan applications and 37% of repeat home purchase applications. So much for the notion that, unlike their predecessors, millennials prefer to rent downtown and avoid car ownership. They are now becoming suburban homeowners like previous generations.

Auto Alliance Favors EV Charging at Interstate Rest Areas
The Alliance for Automotive Innovation, which includes nearly all U.S., European, and Japanese automakers plus startups such as Argo and Cruise, and tech companies such as Panasonic and Texas Instruments, issued a three-page document last month, “Planning for the Electric Future: Charging Station Attributes.” Among its many sensible recommendations is the following, under the heading of EV Charging on Federal Highways: “EV charging should be permitted at federal highway and Interstate properties. With [current] federal restrictions on the location of EV chargers on federal highways, guidance from the White House, U.S. DOT, and DOE will be essential for states regarding the $5 billion in EV charging funding allocated via highway formula.” Incidentally, the new tolled Bengaluru-Mysuru expressway in India will get 14 EV charging stations, according to The Times of India.

Cap, Don’t Remove, Freeways that Divide Communities
The Cross-Bronx Expressway is one of the highways that Robert Moses forced through various parts of the New York City metro area in the 1950s and 1960s. Its 6.5 route-miles cut the Bronx in two. On the other hand, it is one of the busiest freeways in the metro area. Fortunately, rather than proposing its removal, a coalition has devised a plan that would put a deck or “cap” over the below-grade portions, reconnecting neighborhoods with parks and other local land uses. The state DOT has recently allocated $2 million for a feasibility study of capping the two miles that are below grade, at an estimated cost of $1 billion. Projects like this have been implemented in Atlantic City, Dallas, Denver, Duluth, Phoenix, and Seattle, as well as a number of locations in Europe.

Nikola and Tesla Close to Introducing Electric Big Rigs
Last summer Tesla’s Elon Musk announced that its promised Tesla Semi will be produced at its under-construction Gigafactory in Austin. Tesla is also using a few Semi prototypes to deliver cars from its production facility in Fremont, CA to Reno, described as a “fantastic test route.” Competitor Nikola in December delivered its first Tre battery-electric drayage trucks to Total Transportation Services, a company serving the ports of Long Beach and Los Angeles. The Tre has a range of 350 miles and is aimed at regional deliveries, not long-haul freight. Nikola now projects deliveries of its long-distance hydrogen fuel-cell trucks in 2023.

Politics Upending Toll-Financed Causeway Upgrade in Miami
Concerns over likely increased tolls are leading Miami-Dade County officials to rescind the under-way competitive bidding process and possibly start over sometime in 2022. The original unsolicited proposal from the Plan Z consortium called for toll-financed replacement and refurbishment of the tolled Rickenbacker Causeway’s aging bridges and the addition of bikeways and revenue-generating concessions and event spaces along the four-mile causeway linking the mainland with affluent Key Biscayne. The project’s future is now up in the air.

Amtrak Intends to Compete with Texas Central Railway
As part of its $16 billion plan to expand its intercity passenger rail service, Amtrak is proposing more-frequent service between Dallas/Ft. Worth and Houston, the sole route of Texas Central, the planned partially-privately financed high-speed rail service. Since Amtrak is heavily subsidized by taxpayers and charges fares on inter-city trains far below its operating cost, this proposal should be seriously questioned. Then again, struggling (non-subsidized) inter-city bus lines are facing similar threats of highly subsidized competition from Amtrak. How is this in the public interest?

Useful Overview of U.S. Freight Network
Given all the concern over U.S. supply-chain problems, The Road Information Program (TRIP) has produced a useful overview, “The U.S. Freight Network’s Critical Role in the Supply Chain.” Drawing on various federal data sources (including the still-unreleased 2021 DOT Conditions & Performance Report), it details where congestion is worst, the top 20 truck bottlenecks, the top 25 domestic freight corridors (ranked by travel time reliability), and recent data on the condition of major highways and bridges. Go here.

Pennsylvania Legislator’s Plan to “Fix” Turnpike’s Missed Revenue
Since the Pennsylvania Turnpike sensibly shifted from cash to all-electronic tolling early in the pandemic, it has lost $104 million in revenue due to toll evasion (about 7% of total revenue). State Sen. Marty Flynn has a proposal: require the Turnpike to hire back toll collectors to take cash tolls at “high-density locations.” No cost estimate was provided for this proposed mandate, but it would make far better sense to spend the money on proven techniques for getting evaders to pay up, as used by successful toll roads around the country. And if the Turnpike is forced to hire toll collectors, good luck getting rid of them once the evasion problem has been fixed.

Houston I-45 Project Moving Forward Again, for Now
Texas DOT’s $10 billion plan to rebuild I-45 and its connections to I-10 and I-69 on the east side of Houston has received federal permission to continue design work on a section of I-69 and a nearby interchange, while FHWA continues its investigation of possible civil rights violations due to the project’s large planned property takes in low-income and minority communities.

Bullish Forecast for Toll Road Traffic
Rating agency Moody’s Investors Service, in a report released on December 2, estimates that the median toll road will gain 2% more traffic and 4% more revenue in 2022. The vast majority of U.S. toll roads report that their traffic had returned to pre-pandemic levels by the end of 2021, according to the International Bridge, Tunnel & Turnpike Association. One of the few outliers is the Golden Gate Bridge, still impacted by the large increase in working from home.

Maryland Purple Line Gets New Design-Build Contractor
The troubled Purple Line light rail project, which has been seriously delayed by right of way acquisition problems and environmental opposition (leading to the withdrawal of its original design-build team) finally has has a replacement contractor. Purple Line Transit Partners, the P3 company doing the project, in November announced that a team of Dragados USA and OHL USA will be the new design-build company. The project was financed as an availability-payment (AP) design-build-finance-operate-maintain P3.

“Environmental Activists Want to Engineer a Utopia”
That is the title of a thoughtful article stimulated by last fall’s Conference of the Parties (COP26), which aimed to generate commitments from more than 100 national governments on reducing their carbon footprints. Author Michael Sena explains the important differences between a top-down, centrally planned approach to this problem and a more pragmatic engineering approach. The piece appears in the January 2022 issue of Michael’s excellent newsletter on transportation, The Dispatcher. Go here.

How Behavioral Biases Lead to Cost Overruns and Under-Performance
Megaprojects expert Bent Flyvbjerg has a new journal article that seeks to explain in greater depth the underlying reasons why such projects nearly always experience cost overruns and shortfalls in projected performance. He plumbs the relatively new field of behavioral economics for answers. “Top Ten Behavioral Biases in Project Management: An Overview” appears in Project Management Journal, Vol. 52 (6) pp. 531-546.

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Quotable Quotes

“[O]nly 8% of the distance traveled by land in the EU is by rail. Even in the most train-happy countries, Austria and the Netherlands, the figures are 13% and 11%. In [EU] countries, more than 75% of land travel is done by car. Statistics on cross-border rail are patchy, but EU figures show that people made only 6.5 million international trips by train from Germany in 2019. They made 110 million by air, just to other countries in the EU. Shifting a significant share to rail will require huge investments.”
—”EU Railways: Disoriented Express,” The Economist, Nov. 13, 2021

“In the 1980s and 1990s, special interest groups successfully blocked adoption of so-called longer combination vehicles. Utilizing those longer tractor-trailers could have allowed freight to move more efficiently in fewer trucks. That could have meant less tailpipe emissions from big rigs, less-crowded highways, and a less-severe driver shortage. But we caved to special interests and their fear mongering. With autonomous trucks, we can’t repeat this mistake. We must look past the fear and the special interests’ doomsday scenarios and focus on the competitive positioning of our nation’s economy.”
—Christopher Thornycroft (Redwood Logistics), “The U.S. Can Be a Leader in Autonomous Trucks—Or Get Left Behind,” TransportDive, Dec. 6, 2021

“As the firms have discovered, their businesses are less perpetual motion machines than real-world flywheels that inevitably lose energy to friction, says Jonathan Knee of Columbia Business school and author of a book entitled The Platform Delusion. The network effects have proved much weaker than expected. Many users switch between Uber and Lyft. Drivers also flit between them, or to delivery apps, depending on which model offers the best pay. This bargaining power from both sides means the system does not become self-reinforcing after all.”
—Schumpeter, “The Flywheel Delusion: Uber, DoorDash, and Similar Firms Can’t Defy the Laws of Capitalism After All,” The Economist, Nov. 13, 2021

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The post Surface Transportation News: FHWA vs. bipartisan infrastructure bill, traffic congestion, and more appeared first on Reason Foundation.

• Assessing the new bipartisan infrastructure law
• Annual Highway Report says America’s roads aren’t “crumbling”
• Outlook for electric vechicle charging on highways
• Do electric vehicles weaken Uber and Lyft?
• Could highways themselves recharge vehicles?
• Further undermining the gas tax
• News notes
• Quotable quotes

Assessing the Bipartisan Infrastructure Law

Media coverage of the bipartisan infrastructure law (BIL), the Infrastructure Investment and Jobs Act, has been all over the map. Some news articles have presented the bill as $1.2 trillion of new money. However, the total includes all the funds authorized for five more years of the federal surface transportation program, with the law’s net new money generally estimated at $550 billion. And most of that funding, of course, comes from the general fund, meaning it is borrowed from those who purchase Treasury bonds, to be repaid by taxpayers.

Many media reports mischaracterized this bipartisan bill as a “roads & bridges” law. The BIL does provide $110 billion of the new money for highway programs, but that is just 9.2% of the $1.2 trillion total. Counting both old and new money, the Federal-Aid Highway Program’s annual authorizations over the coming five years are 26% above the last year of the FAST Act.

By contrast, transit formula grants are up 38%, transit capital investment grants are up 30%, and annual passenger rail authorizations are triple what was authorized for FY20. (These numbers are based on my interpretation of a seven-page detailed spreadsheet compiled by Jeff Davis of the Eno Center for Transportation, by far the most reliable source on federal transportation budgets.)

As I wrote in the August issue of this newsletter about the original bill that passed the Senate, there are some good points in it. The bill includes a long-needed $15 billion increase in the federal cap on tax-exempt private activity bonds (PABs) that have been important financing tools for a growing number of public-private partnership (P3) projects. The Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program has also been continued, though at slightly lower funding levels. Another provision (Section 71001) provides planning grants for jurisdictions seeking to embark on complex P3 project procurements. And Section 70701 requires a Value for Money (VfM) analysis for any project seeking either a TIFIA or Railroad Rehabilitation and Improvement Financing (RRIF) loan. And this bill, unlike the current version of the still-pending reconciliation bill (Build Back Better) that has been passed by the House, avoids mandating Davis-Bacon prevailing-wage provisions for projects issuing PABs. There is also a new Congestion Relief Program that offers grants to urban areas seeking to implement an integrated congestion management system that includes variably priced express toll lanes. And the BIL codifies the One Federal Decision policy that was put forth by the previous administration but rescinded by the Biden administration; this should help reduce the excessively long environmental process for major transportation projects.

Unfortunately, there are also many negative aspects of this legislation. First, by providing gobs of “free federal money,” the new bipartisan infrastructure law will undercut the use of long-term financing for major projects, which is far wiser than paying cash for a handful of, say, 10 major bridge replacements. The bond market has already responded with falling yields, since the BIL represents “a move by federal officials toward paying directly for [a few] projects, rather than standing back and ensuring states and cities can borrow cheaply for infrastructure while leaving the details to the locals,” as The Wall Street Journal’s Heather Gillers put it. At the same time, many of the best prospects for toll-financed P3 bridge replacements may well be shifted to the new federal Discretionary Bridge Program, and left without a source of ongoing maintenance funding.

Coming at a time when the economy is growing fast and experiencing shortages of skilled construction workers, this seems an odd time to enact a trillion-dollar stimulus bill. All that money focused on infrastructure, combined with a number of union labor mandates, is likely to drive up the already record-high cost of building and rebuilding U.S. infrastructure.

Another disturbing aspect of the BIL is the large increase in “discretionary” programs, in which either the Office of the Secretary, FHWA, or FTA will be able to define the criteria they prefer, rather than what state or local officials decide they need. “We’ve never seen anything on this scale before. The amount of funding and the number of new discretionary programs that are being created are unprecedented,” AASHTO executive director Jim Tymon told The Wall Street Journal, “The discretionary programs are going to allow the administration to pick the projects that really fit their policy lens.”

There is also a lesson to be learned from prior federal stimulus programs. As Jill Jamieson of Tufts University told Inspiratia Infrastructure, “As we saw in 2009 with President Obama’s American Recovery and Reinvestment Act, the last time the federal government increased spending on infrastructure, we saw a proportional decrease in spending at the state and local levels.” She also noted the “lack of consideration of life-cycle asset management” in the measure, due to its absence of long-term revenue-based financing.

And finally, as I have written elsewhere, this sweeping $1.2 trillion measure ignores the 596-page report of the Transportation Research Board’s special committee on the future of the Interstate Highway System. Those experts found that our most important surface transportation infrastructure is wearing out and needs reconstruction, at an estimated cost over 20 years of about $1 trillion. Apart from 10 to-be-selected major bridge projects, the BIL is silent on this critically important national investment need.

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Annual Highway Report Finds America’s Highways Aren’t Crumbling
By Baruch Feigenbaum

Reason Foundation recently released its 26th Annual Highway Report. The study evaluates every state on the cost-effectiveness and performance of its highway systems. Similar to past years, the best- and worst-performing states were a mix of high-population and low-population states. The five best-performing state highway systems in this edition were North Dakota (ranked first overall), Virginia, Missouri, Kentucky, and North Carolina. The five worst-performing, least cost-effective states were New Jersey (ranked last overall), Rhode Island, Alaska, Hawaii, and New York.

In the report, each state is evaluated in 13 categories. Four categories measure highway spending, four others measure pavement quality, one measures urbanized area traffic congestion and four categories measure safety.

Fatality rates make up three of the safety measurements with structurally deficient bridges making up the fourth category. All category scores are ratios. For example, if the average number of deficient bridges nationally was four, Georgia had two deficient bridges, and Nebraska had eight deficient bridges, Georgia’s score would be 0.50 and Nebraska’s would be 2.00. Each of the ratios is added together and divided by 13 to determine the final score.

We made one small change to this year’s report. Instead of measuring disbursements by lane miles, centerline miles, and vehicle miles traveled per lane mile and using a z-score to combine the three measurements, we used lane miles only. Last year, we switched to the combination method from lane miles in an effort to balance out the higher densities of urban states with the less-traveled highways in rural states. However, while the combined approach did not noticeably change the scores it did make the disbursement data more complicated.

Overall, the Annual Highway Report finds the condition of the state highway systems improved. While much of the political hype that political leaders used to promote the recently-passed bipartisan infrastructure bill surrounds the claim that America’s highways are one big pothole in need of more spending, these claims are not supported by the data. Over the 26 years of this report (using FHWA data through 2019), pavement conditions have continued to improve nationally. Between 2018 and 2019, the quality of pavement also improved. Poor rural Interstate pavement, poor urban Interstate pavement, poor rural arterial pavement, and poor urban arterial pavement decreased by 2%, 4.97%, 4.35%, and 3.84% respectively.

The reports show the percent of structurally deficient bridges continued to decrease, this year by 2.10%.

Finally, the overall fatality rate, rural fatality rate, and urban fatality rate decreased 1.76%, 7.35%, and 0.0001%.

However, between 2018 and 2019 state highway system costs increased. Total disbursements, capital and bridge disbursements, maintenance disbursements, and administrative disbursements increased 3.80%, 2.09%, 3.25%, and 5.77% respectively. Increasing disbursements is not necessarily a problem, particularly if system quality improves. And all nine measures of system quality show improvement. However, each of the cost increases was significantly higher than the Consumer Price Index, which increased 1.56%.

While we are still analyzing the ongoing effects of the COVID-19 pandemic on transportation, it impacted urbanized area traffic congestion significantly. The report’s congestion data are from 2020, which was heavily impacted by working at home, especially from March to September of 2020. As a result, the number of hours that drivers spent in congestion differ drastically from the previous report. And the change was not consistent from state to state. The number of hours stuck in traffic congestion in Utah declined from 7.40 to 1.75, while in New Jersey the hours increased from 51.70 to 86.14. In part, these changes have to do with the share of vehicles commuting (and working from home) compared with the share delivering freight in a given state.

States with lower overall costs and good system performance, such as Virginia (2nd overall), tend to score highest in this report. But states that struggle in one category and excel in the others, as North Carolina (5th overall) does with percent structurally deficient bridges, can also rank highly. And a state with above-average costs and outstanding system quality, like Utah (6th overall), can also rank highly. States with high costs and poor performance, however, rank poorly. New Jersey (last overall) is an example of this. But, states with low costs and poor highway system performance tend to rank far below average as well. For example, Oklahoma ranked 36th.

Why do some states excel in the report’s rankings?

There are four factors that high-performing states tend to share. First, they have quantitative benefit/cost selection processes. North Carolina and Virginia offer the best models. At the state or local level, officials create a list of projects. The projects are evaluated based on costs (including construction and planning) and benefits (including reductions in fatalities and congestion). The projects that receive the best scores are the ones placed in the short-term improvement plan. This quantitative process helps reduce political interference.

Innovative delivery is also important. Public-private partnerships are the gold standard project delivery method, but even design-build is an improvement over design-bid-build. P3s are not just for major metro areas like the Beltway. Utah has also used P3s for its Salt Lake City managed lane network and P3s can also be used for somewhat smaller projects such as Pennsylvania’s availability-payment bridge replacement project that improved more than 550 small bridges. Overall, Pennsylvania’s bridges still need attention, but they are in much better condition than they were 10 years ago.

Third, states can use an internal reward system. Oftentimes the problem is not a lack of qualified staff or resources but the design of governmental transportation entities. States that want to improve their rural arterial pavement, for example, should set a goal of reducing the percent of pavement in poor condition by 20% and ensure the department resources are allocated for that goal.

Fourth, states should set a goal of learning from peer states. Georgia is able to maintain good pavement conditions at low overall costs. Comparable states should consider speaking with Georgia Department of Transportation engineers through national or regional trade groups such as the American Association of State Transportation and Highway Officials (AASHTO) and the Southern Association State Highway and Transportation Officials (SASHTO), or at conferences focusing on pavement quality such as the Transportation Research Board’s Annual Meeting.

One of the challenges of the report is ensuring it is fair to all states. On average, smaller, more-urbanized states tend to perform more poorly. Some of these states have complained that the report is biased against them. They argue that highways with higher average annual vehicle counts will have worse pavement quality. However, states with more traffic typically also have higher gas tax revenues or tolls that should balance out the higher traffic volumes and be used to maintain and upgrade the highway systems.

This past year we have conducted a series of multivariate regressions to determine which external factors affect a state’s highway performance. Researchers have speculated that colder weather (specifically the freeze-thaw cycle), more elevation (highways in hilly or mountainous terrain), smaller system size (larger state systems have local roads and elements of scale), and higher population density result in a lower ranking. But of those four, only population density was statistically significant. The challenge is factoring population density into the report fairly, without adversely harming more-rural states. As we continue to improve the report in the future, we are considering the addition of a density factor and welcome your feedback as well. The full report is available here.

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What’s the Outlook for the EV Charging Network?

The bipartisan infrastructure law provides $7.5 billion in federal funding to increase the extent of electric vehicle charging infrastructure. Of that total, $5 billion will be allocated by formula to the states by FHWA, under a program called the National Electric Vehicle Formula Program. Those funds are intended to support electric vehicle charging facilities along “designated alternative fuel corridors.” The other $2.5 billion will fund the Charging and Fueling Infrastructure Program. Via discretionary grants, it will provide funding for EV charging, as well as hydrogen, propane, and natural gas fueling infrastructure. These grants will be available to cities, as well as state governments.

Most of the discretionary funding is likely to be devoted to large numbers of Level 2 chargers, which are relatively inexpensive but can only provide about 25 miles of propulsion energy per hour of charging. This is the kind of charger that could be installed at workplaces, shopping mall garages, and other places, for electric vehicle owners to top up their batteries while doing other things. Their cost is in the range of $5,000 to $6,000.

The real challenge is building out the network of chargers for long-distance travel. Here the requirement is for DC fast chargers, which can provide a major recharge in 30 to 45 minutes. These chargers cost $110,000 or more, meaning the federal grant funds won’t provide as many fast chargers compared with the inexpensive Level 2 chargers. Of the fast chargers in place as of mid-summer 2021, The Wall Street Journal reported that 56% were proprietary Tesla chargers, 15% were part of the Electrify America program run by Volkswagen, 8% by provider EVgo Network, another 8% by ChargePoint Network, and 13% by various others. An emerging player is the Electric Highway Coalition organized by (thus far) 14 electric utilities focused mainly on the eastern half of the country.

The major omission in the Formula program is the Interstate Highway System. To be sure, the government’s designated corridor system allows charging stations and alternative fueling sites to be listed if they are no more than five miles from an Interstate off-ramp. But it is illegal to place them in the most logical and convenient place: at Interstate rest areas right alongside the highway. That’s due to a still-in-place 1960 federal law aimed at protecting the gas stations and fast-food places that were built around Interstate off-ramps when those brand-new superhighways bypassed numerous small towns in the 1960s and 1970s. That law is staunchly defended by the National Association of Truck Stop Operators (NATSO), whose membership also includes numerous franchisees of gas stations and fast-food outlets. Every time state DOTs have pushed for legislation to overturn the ban on commercial services, NATSO has lobbied fiercely and successfully to defeat it.

The situation is very different on those Interstate highways that were financed via toll revenues instead of federal fuel taxes. Because nearly all were already in existence or underway when Congress launched the Interstate program, they were grandfathered in and allowed to retain their customer-friendly service plazas, which offer refueling, food services, other shopping, and (more recently) EV charging stations.

A growing number of state transportation departments want to offer convenient electric vehicle charging at their Interstate rest areas. They are part of an informal coalition that has emerged this year, including an array of environmental and EV organizations and other business groups. An exemption to the federal ban, specifically allowing EV charging at rest areas, was part of the House surface transportation reauthorization bill earlier this year, but that bill got dropped in favor of the bipartisan infrastructure bill, which President Joe Biden recently signed into law. Efforts to include the EV charging provision in what is now the $1.8 trillion Build Back Better bill have so far not succeeded.

Developers of charging networks point out that it’s not sufficient to legalize only EV charging at rest areas. Since it takes 30 or more minutes to recharge via DC fast chargers, people need something to do while they’re waiting. “It’s going to be in a well-lit, secure place where you can get a cup of coffee, catch up on your emails, charge your vehicle, and move on,” Jeffrey Lyash, CEO of the Tennessee Valley Authority, told Wall Street Journal reporter Jennifer Hiller. And I would add, a place to sit down and have a meal. That is what is on offer when driving on the 10% of the Interstate system financed via tolls.

It’s time for Congress to rethink Interstate rest areas and scrap this obsolete barrier to providing full services for the motorists and truckers who use long-distance Interstates.

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Are Electric Vehicles a Threat to Uber?
By Marc Scribner

Last month, Axios’ Joann Muller published a provocative article suggesting that vehicle electrification poses serious risks to ride-hailing incumbents Uber and Lyft (“Why the electric car era is a threat to Uber and Lyft,” Nov. 5). Muller points to a new report from investment analysts at PitchBook Data, which highlights startup competitors that eschew the core elements of the incumbents’ business model— distributed vehicle ownership and driver-contractors—in favor of centrally owned fleets driven by employees. However, while there may be certain advantages to this approach to ride-hailing in the electric vehicle age, the biggest threats to ride-hailing remain the political efforts to directly undermine Uber and Lyft’s business models, not electrification.

The ride-hailing business model adopted by Uber and Lyft has allowed them to grow quickly without weighing down their balance sheets with the main assets used to provide service to customers: cars. Instead, drivers operate as independent contractors and provide their own cars that are then hailed by customers on their apps. Muller’s article discusses a handful of competitors such as Revel, Alto, and Kaptyn that adopt the very different model of purchasing vehicles and hiring drivers as wage-earning employees. She argues this may work in these new companies’ favor, and against the long-term viability of Uber and Lyft, because electric vehicles may be too expensive for contract drivers to purchase, and a centralized fleet may make EV charging infrastructure problems easier to solve.

The report Muller cites from PitchBook (“The Future of Taxis Is Electric and Asset Heavy,” Oct. 26) deserves closer scrutiny. It notes that the ride-hailing industry is under heavy pressure from both politicians and investors to decarbonize. In May, the California Air Resources Board approved its Clean Miles Standard regulation that will require 90% of ride-hail vehicle-miles traveled to be electric by 2030. Cities such as London and Paris are planning to establish zero-emission zones where all vehicle operations must be electric starting in 2025. Some other jurisdictions are expected to follow.

Uber and Lyft have responded by pledging to go all-electric through a combination of driver incentives and making electric vehicles available for rent by their contractors. But this may be easier said than done, according to the PitchBook report. Given that the vast majority of their driver-contractors are moonlighting, $50,000 electric vehicles “are likely beyond the reach of part-time drivers.”

In addition, the “lack of charging infrastructure in many locations—particularly city apartments where many drivers live—and lengthy charge times eating away at drive times” also complicate Uber and Lyft’s electric-vehicle commitments. The PitchBook report then concludes ride-hailing companies that purchase and manage fleets of electric vehicles, deploy charging infrastructure, and bring drivers in-house as employees will be better able to meet these challenges than Uber and Lyft.

However, there are reasons to be skeptical of this playing out as PitchBook envisions. Just as Uber and Lyft’s aggressive electrification commitments face an uphill battle, so too do the aggressive government policies prompting those commitments. If regulatory targets are set higher than reality can bear—thereby causing either severe harm or embarrassment—they are likely to be repealed or relaxed before the worst damage is done. Perhaps some jurisdictions would be willing to accept the fallout from unpopular and costly policies, but this approach would be difficult to sustain in most places because democracy is fundamentally a popularity contest.

PitchBook’s report also assumes EV prices stay high in perpetuity and these greener cars remain out of reach from most consumers, including those who drive as contractors for ride-hailing services. It also assumes battery charging remains very difficult and expensive for a large share of the driving population. But ride-hailing involves a small share of the consumer automobile market and it is important to consider the broader market before the ride-hailing implications. Mass-producing electric vehicles that are price-competitive with conventionally fueled vehicles, at least after subsidies, is the only way for this transition to occur. If they are not affordable to the majority of drivers, the transition most likely stalls.

None of this is to preclude asset-heavy companies from the future of ride-hailing. There will be a strong basis for ride-hailing companies to purchase and operate fleets of vehicles when technology allows them to replace their drivers with automated driving systems, which are unlikely to be available for consumer purchase—at least initially—due to the heavy maintenance and monitoring demands and anticipated liability concerns. But electrification alone should not be an insurmountable challenge for Uber and Lyft. If it is, that likely means there are much bigger problems facing the age of electrification.

Rather than electrification, Uber and Lyft’s principal near-term threat comes from politicians seeking to undermine one of the core elements of their business model: the ongoing attacks on drivers’ independent contractor classification at the behest of labor unions. California’s Assembly Bill 5 from 2019, which voters aimed to overturn with the passage of Proposition 22 in 2020, remains in legal limbo in the Golden State. Even if the current litigation over the constitutionality of Prop. 22 is resolved in favor of the ride-hailing companies, other union-dominated jurisdictions are likely to pursue anti-contractor legislation similar to AB 5.

Costly multi-front political and legal battles may well cripple an industry still struggling to actually turn a profit for increasingly impatient shareholders. The race to electrification may be bumpy for Uber and Lyft, just like for everyone else, but it is not an existential threat to be worried about.

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Could Highways Recharge Electric Vehicles?

A lengthy article on this topic, “Could Roads Recharge Electric Cars? The Technology May Be Close,” by Kerry Hannon appeared in The New York Times on Nov. 29. Hannon discussed two projects underway, respectively at Purdue University (with the Indiana Department of Transportation) and another with Michigan DOT and the state’s new Office of Future Mobility and Electrification.

The rationale for this concept (which is also being researched in Europe) is that networks of electric chargers will cost many billions and will take a long time to recharge an EV or electric truck on a long-distance trip. Instead, therefore, install some kind of magnetic coil beneath the pavement and let it recharge moving vehicles as they drive along, analogous to recharging a smartphone by placing it on a pad for “inductive” recharging.

You can appreciate the many technical challenges to making this work in the world of real highways. First, to prevent the inductive coils from being damaged by 80,000-pound big-rigs rolling over them, the current Purdue plan is to bury them beneath the surface, with a gap between the actual transmitter and the receiver on the vehicle of 10-to-15 inches. The greater this difference, the less power that gets transferred. Second, no one knows how much the buried device will be damaged by the overpressure from millions of vehicles, or by water seepage, or the other factors that affect pavements over time.

A second set of questions concerns the vehicles that need to be recharged. Just as there is a chicken-and-egg problem between the growth of electric vehicle charging stations and the fraction of EVs in the vehicle fleet, there is a comparable problem of no electric vehicles today being equipped with whatever kind of receiver would be necessary to pick up the transmitted energy to recharge the vehicle’s battery. Original equipment makers (OEMs) are not going to start adding such a component to their EVs until a large fraction of the highway system is equipped for pavement-based recharging.

Then there’s the currently unknown cost per lane-mile to add inductive charging to pavements. The Transportation Research Board’s 596-page report on the future of the Interstate highway system found that much of the system’s underlying pavement is past its useful life, and that rebuilding (and selective widening) of the majority of the system would cost about $1 trillion over the next several decades. It would make little sense to spend billions installing inductive charging in Interstates that will soon be rebuilt.

Most of these points were at least mentioned in the New York Times article, but here’s a big one that was missed: With thousands of vehicles all belonging to different owners driving along a stretch of highway with inductive charging, how would individual vehicle owners be billed for the electricity they pick up and store? No provider of electricity is going to give it away, so unless there is a reliable way to identify each customer and the amount of electricity each consumes, the whole idea is unworkable.

The article does note that federal law prevents the sale of electricity (and any other goods or services) within an Interstate right of way and at Interstate rest areas (apart from vending machines). So in addition to being difficult or impossible to bill the customers, it would also be illegal, at least on Interstates.

With all these fairly obvious shortcomings, I’m surprised that the Purdue project is being funded by the National Science Foundation.

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Further Undermining the Gas Tax as the Highway User Fee

Readers of this newsletter know that I am dismayed by the gradual erosion of the gasoline tax from its original identity as a dedicated user fee (users-pay/users-benefit) to what most people now think of as “just another tax.” This has come about in recent decades by elected officials continually coming up with new (non-highway) uses for the revenues.

But in the space of a week or two, today’s high gasoline prices have led to a flurry of political proposals to suspend collection of gas taxes, leaving highways bereft of funding. Just before Thanksgiving, Florida’s Republican Gov. Ron DeSantis proposed a five-month suspension of the state’s gas tax to save motorists (aka voters) an estimated $1 billion in 2022. The move was described by DeSantis and supporters as a “tax cut.”

But this idea has now become national and bipartisan. Axios reported that a number of members of Congress, from both parties, are calling for suspending the federal gas tax “to help working families,” as Rep. Abby Finkenauer (D-IA) put it. Joining her in this call is Rep. Charlie Crist (D, FL—but formerly a Republican), as well as several Republican legislators in New York State and Rep. Yvette Herrell (R, NM).

Would these politicians seriously call for suspending electric bills or cable bills or water bills if the costs of running those utilities were going up? At least in those cases, the management of the utilities (and their shareholders, if investor-owned) would be up in arms. But where are the heads of state transportation departments as these reckless proposals are being put forth? Alas, since in most cases they are appointed by their governors, they are generally precluded from pushing back against such proposals.

This points to a basic flaw in allowing our highways to be run as politically managed enterprises. If at least major highways were organized and managed as highway utilities (as discussed at length in my book, Rethinking America’s Highways), one important result would be depoliticization and better stewardship of this vital infrastructure.

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News Notes

Musk’s 29-Mile Loop Wins Las Vegas Franchise
At the end of October, Elon Musk’s The Boring Company was awarded a franchise to build a 29-mile Loop tunnel connecting various resorts on and near the Strip with downtown, the Allegiant Stadium, and McCarran International Airport. The existing 2.7-mile Loop under the Convention Center opened in June, at a cost of $52.5 million ($31 million per mile). If that cost applies to the 29-mile loop, its cost would be $900 million. That would apparently be borne by Boring Company, which hopes to charge fares between $5 and $20 per trip, depending on length. The new Loop would also use Tesla vehicles to transport passengers.

New York Times Article Blasts Transportation Cost Overruns
In “Years of Delay, Billions in Overruns: The Dismal History of Big Infrastructure,” veteran transportation reporter Ralph Vartabedian documents the sorry track record of many U.S. transportation megaprojects. A particular focus is on Honolulu’s now $11.4 billion elevated rail transit project and the $100 billion California high-speed rail project, both grossly over-budget and many years from completion. The subhead notes that, with this track record, “Delivering $1.2 trillion in new infrastructure will be tough.” Kudos to The New York Times for publishing this article.

Anti-Toll Legislation May Be Vetoed in Pennsylvania
A bill to forbid PennDOT from using tolls on any project unless specially approved by the legislature was approved by the state Senate, but failed to achieve the two-thirds margin needed to prevent a gubernatorial veto. The bill, SB 382, also sought changes to restrict the operations of PennDOT’s P3 unit. The project in question of the agency’s plan to toll-finance the reconstruction or replacement of nine major bridges on the Interstate highways of Pennsylvania.

Express Toll Lanes Gaining New Venues
Kansas and Tennessee are likely to become the next two states to implement express toll lanes to provide an alternative to congested general-purpose lanes. In Kansas, the Overland Park city council approved a plan to add express toll lanes to congested Highway 69, at an estimated cost of $655 million. Kansas already has some toll roads, under the auspices of the Kansas Turnpike system. Tennessee has no toll roads, but TDOT is now studying the possible conversion of underused HOV lanes to HOT lanes, such as on I-24, I-40 and I-65 in Nashville. Traffic data show the HOV lanes are under-used by carpools and have high violation rates. Tennessee State University and Vanderbilt University are assisting TDOT with these studies.

Arizona Missing Express Toll Lane Opportunity
Arizona has announced plans to relieve congestion on a hilly stretch of I-17 north of Phoenix. The plan is to add reversible “flex lanes” alongside eight miles of the corridor. Flatter parts of this 23-mile corridor would get an extra lane in each direction, at an overall cost of $446 million. If developed instead as variably priced express toll lanes, a significant fraction of the project cost could likely be recouped from toll revenues, so that those directly benefitting from the new capacity would be paying much of the cost. Congress years ago made it legal to add toll lanes to existing non-tolled Interstates, and Arizona already has a transportation P3 law. What a missed opportunity for ADOT’s limited budget.

Dubai to Privatize Its Toll Road System
The Dubai Securities and Exchange Higher Committee announced last month that shares in the Dubai toll road system will be offered on the Dubai Financial Market. The Salik toll road system uses all-electronic (cashless) tolling. It has 3 million registered vehicles, of which 1.8 million are registered in Dubai itself. The motivation for the listing is to increase the size of the country’s stock market.

Driverless Deliveries Underway for Walmart
Customer orders are being delivered from a Walmart “dark store” to customers via automated trucks with no safety drivers in Bentonville, Arkansas. The vehicles have been developed and are operated by start-up company Gatik, and they began fully driverless operation there in August. They are described by Gatik as “frequent, revenue-generating, daily runs that our trucks are completing safely in a range of conditions on public roads.” Approval for this service was granted to Gatik and Walmart by the Arkansas State Highway Commission in December 2020.

More Express Toll Lane Are on the Way
The latest ETLs in metro Denver—on an 18-mile stretch of I-25—will open to traffic in mid-December, after three years of construction and a cost of $419 million. And in California, Caltrans last month began testing the electronic tolling system for the new ETLs on U.S. 101 in San Mateo County, with the southern segment set to open early next year and the northern segment to follow later in the year. The total length is 22 miles. And in Austin, the Central Texas Regional Mobility Authority is beginning the planning process to extend the successful ETLs on the MoPac expressway southward. CTRMA held a virtual open house on Nov. 22 to discuss the plan with the public.

Driverless RoboTaxi Service Begins in Shenzhen, China
Startup company AutoX, with support from e-commerce firm Alibaba, announced last month that it is operating fully driverless RoboTaxis serving 168 square kilometers of Shenzhen, the technology capital of Guangdong Province. The company is the first to offer such service in an entire district of a major city in China. Also last month, Pony.ai, in cooperation with Baidu, has been approved to offer driverless RoboTaxi service in 60 square kilometers in Beijing. The approval is limited to 100 vehicles.

Contrasting Approaches to Electronic Tolling
The Ohio Turnpike last month announced that is installing a new $20 million toll plaza in Newton Township that will include “highway-speed E-ZPass lanes” (generally known as “open road tolling”). This is part of a $200 million plan to “modernize” the Turnpike. By contrast, the Pennsylvania Turnpike has already converted to all-electronic (cashless) tolling, Florida’s Turnpike continues tearing out “toll plazas” in favor of all-electronic tolling. This process began several years ago in Miami-Dade County, expanded northward to Broward County, and as of last month is now in effect in Palm Beach County and Martin County. The process will conclude within three years with all toll plazas demolished and replaced by highway-speed electronic toll collection.

Croatia Plans Nationwide Electronic Toll Collection
On Nov. 25, Croatia’s Ministry of Transport announced that electronic tolling will be introduced nationwide. The goal is a cashless toll system compatible with European Union standards. The specifics were introduced in a legislative package which the Ministry expects will be approved.

First Army Corps P3 Project Reaches Financial Close
The Fargo Moorhead Flood Protection P3 (in North Dakota and Minnesota) has reached financial close, Public Works Financing reported in its October 2021 issue. It will deliver a 30-mile diversion channel on the west side of Fargo Moorhead, which the winning company will also operate and maintain for 30 years. The overall project had to be split into two parts, due to federal budget-scoring rules that require long-term financing to all be scored up-front, so the Corps could not be the counterparty for the P3 agreement. That role went to the local Flood Diversion Authority. Financing for the P3 portion includes a $529 million Water Infrastructure Finance and Innovation Act (WIFIA) loan, $273 million of tax-exempt private activity bonds, and a senior note provided by MetLife Investment Management.

Container-Stacking Rule at Port of Long Beach Rescinded
West Coast ports have been woefully short of space to store containers unloaded from ships (and others waiting to be loaded). At the Port of Long Beach, one reason was a long-standing (and enforced) rule that containers could be stacked no more than two high. If you’ve ever driven past a container port, you know this is ridiculous, but local protests about “views” led to political support for this bizarre rule. But by some sort of political miracle, the rule was rescinded late in October, permitting Long Beach to make much better use of its limited acreage for stacks of containers.

Privately Financed Expressway and Bridge Approved in Louisiana
A project to add a toll bridge across the Red River with an expressway linking it to U.S. Highway 71 received unanimous support from the governing body of one of the two parishes that would be connected, Bossier Parish. Approval will also be needed from Caddo Parish, across the river. The Red River Express was proposed and would be developed and operated by Tim James, Inc., which has developed several toll projects in Alabama. The Army Corps of Engineers’ approval is also required. Design and construction would lead to the roadway opening in 2026.

Nuclear Power Needed for a Carbon-Free U.S. Electricity System
A team of scientists and engineers from MIT and Stanford released a study last month that urges California to delay retiring the state’s last operational nuclear power plant, Diablo Canyon. Keeping it in operation until 2035 (instead of 2025) would reduce carbon emissions from the state’s electric utilities by more than 10% and save $2.6 billion in electricity costs. Extending its operating life to 2045 would avoid the need to convert 90,000 acres to 18 GW of solar power. And waste heat from the power plant could desalinate water at lower cost than other methods.

E-470 Drivers Promised Lower Toll Rates
The board of the E-470 Public Highway Authority last month announced rate reductions each year from 2021 to 2024. Toll rates were frozen in spring 2020, due to the economic effects of Covid-19. Traffic has only partly recovered from 2019 levels, and is not expected to get to that level until 2023. The toll road was presented with an unsolicited buyout offer in 2019 from ROADIS, an international toll road operator owned by a major Canadian pension fund. That offer was not accepted by E-470’s governing board.

Major Freight Company Plans Electric Big-Rigs
Sysco, which delivers food products to supermarkets and restaurants nationwide, last month announced that by 2030 it plans to have 35% of its big-rig trucks powered by electricity. That percentage equates to 2,500 electric big-rig tractors. Sysco is the country’s largest foodservice distributor.

Infrastructure Bill Won’t Assist Port Automation
The bipartisan infrastructure bill signed by President Biden promised to invest more federal money in all modes of transportation. Yet, as pointed out by Reason reporter Eric Boehm, none of the $17 billion designated in the bill for ports can be spent on automation. The $2.6 billion of that sum which is dedicated to upgrading equipment at ports (to include reducing emissions) cannot be used for any automated equipment. Page 308 of the 1,600-page bill requires that all such equipment be “human-operated” or “human-maintained.” This is a gift to the longshoreman’s union, which staunchly oppose any automation at America’s ports. U.S. ports are far less productive than major ports in Asia and Europe.

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Quotable Quotes

“Just about doubling the federal government’s expenditure on infrastructure overnight could lead to waste, however. Cost overruns often bedevil American infrastructure projects. It is more expensive to build rail in America than in almost any other country, according to Transit Costs Project, a research group. The price of building highways has also soared. That just about anyone can mount a legal challenge against public works in their vicinity is part of the problem, leading to delays and missed budgets. And the current backdrop is hardly propitious, with supply-chain congestion affecting even the most basic home-building projects.”
—“Infrastructure Year: Unlocked,” The Economist, Nov. 13, 2021

“The truth is, the Washington region is facing a population boom over the next quarter-century that includes a projected 400,000 new residents and 200,000 new jobs in the Maryland suburbs. Without major new investments in both highways and transit, growth will overwhelm existing infrastructure, and the upshot will be daily misery for everyone. . . . If those suburban [Maryland] toll lanes are not built—not just the first phase segments but along the entire length of the Beltway and further north on I-270—it’s a sure bet that today’s terrible traffic will become tomorrow’s mind-bending gridlock.”
—Editorial Board, “No One Welcomes Tolls on Maryland Highways, but the Alternative Would Be Worse,” The Washington Post, Nov. 20, 2021

“Long-haul trucking is where we will first see this technology really making an impact. There is a current shortage of drivers. At the same time, to be a truck driver is one of the most dangerous professions in North America. From a self-driving technology perspective, driving on highways, although very difficult, is much easier than driving in cities. Last-mile delivery, food delivery, it’s not clear what that [AV] product should look like. Robotaxis are an extremely hard problem, and if you want to really have a market, you have to go to the downtown core, and it’s much more difficult. For long-haul trucking, you can automate certain corridors.”
—Raquel Urtasun, Founder of Waabi, in Vipal Monga, “Solving the Self-Driving Puzzle,” The Wall Street Journal, Nov. 10, 2021 

“The Davis-Bacon Act requires workers on federally funded projects to be paid the prevailing wage, and cost-cutting advocates have long urged its reconsideration. Yet prevailing wages are interpreted quite differently in different locations. In New York City, the Comptroller determines the prevailing wage. For electricians, in 2021 that was $58 per hour, with a supplemental benefit requirement $58.46 [per hour]. After seven hours in a day, overtime kicks in, causing the wage to increase to $82 per hour and the benefit rate to rise to $62 per hour. . . . The Comptroller’s prevailing wage is significantly higher than the average wage as reported by the BLS for the New York metropolitan area ($36 per hour). By comparison, in Houston, the prevailing wage is listed as $31 per hour and the benefit level is $9 per hour. The BLS reports that the average wage for an electrician in Houston is $25.47 per hour, about three-quarters of the New York City figure from the BLS.”
—Edward Glaeser and James Poterba, “Economic Perspectives on Infrastructure  Investment,” Aspen Economic Strategy Group, Jul. 14, 2021

The post Surface Transportation News: Bipartisan infrastructure bill, ranking state highway systems, and more appeared first on Reason Foundation.

• Dealing with “double taxation” on toll roads
• Why politicians can’t fix the logistics mess
• Trucking study urges EVs to pay per kilowatt-hour
• Ridehailing companies: hype versus reality
• New study: Cars can lift the poor out of poverty
• What future for urban-area parking?
• News Notes
• Quotable Quotes

Dealing with “Double Taxation” Objections to Tolling

Highway user groups, especially in the trucking sector, have generally opposed any expansion of tolling in the United States. One reason for this is that just about all our legacy toll roads are being fully paid for by their toll revenues. But their customers also pay the usual federal and state fuel taxes, so they are actually paying twice to use the same highway. A second concern is that in some states—New York, New Jersey, and Pennsylvania, in particular—legislatures have required toll agencies to divert significant fractions of their toll revenues to non-toll-road and often non-highway uses. This amounts to yet another tax, just on toll road customers, instead of those other projects being funded out of general taxes paid by all taxpayers.

Over many years of talking with and giving presentations to trucking groups and other highway user groups (e.g., AAA), I developed a set of customer-friendly tolling provisions, aimed initially at new instances of tolling, such as toll-financed reconstruction and modernization of aging Interstate highways. One of the most important of these provisions is to eliminate “double taxation,” by giving rebates of fuel taxes incurred by customers of the new tolled corridors. 

In conversations with state transportation departments (DOTs), I’ve seen coolness, if not opposition, to this idea. State DOTs are becoming concerned about the projected decline of fuel tax revenues in coming decades (due to ever-tougher federal Corporate Average Fuel Economy, CAFE, standards regulations and the effort to replace petroleum-fueled vehicles with electric vehicles). They are not keen on giving up a portion of this shrinking fuel-tax pie. My response has always been, “But look at the benefits. If fuel-tax rebates remove a major obstacle to toll-financing your second-generation Interstates, won’t you be better off than if you tried to use dwindling fuel tax revenue for this important infrastructure renewal?”

Like most of them, I was educated as an engineer, so I finally concluded that only a realistic quantitative demonstration could persuade them. Over the past year I have constructed a quantitative model of a hypothetical mid-sized state using toll financing—with fuel tax rebates—to rebuild and modernize its long-distance Interstates. It’s been just posted online here.

This was a pretty complicated exercise. Since every state is different, the first task was to create a composite mid-size state, using federal highway data on 10 states in the middle of the population distribution. On average, they each had four long-distance Interstates, totaling 2,595 lane miles. I modeled this as four identical corridors, two of which needed only reconstruction and the other two also needing one additional lane in each direction.

The next step was estimating the cost of both reconstruction and lane additions. For the data needed to do this, I relied on the most recent unit cost data for both types of Interstate construction from the Federal Highway Administration (FHWA’s) Highway Economic Requirement System (HERS) database. The most recent figures, alas, are from 2016, which I updated to 2019 using FHWA’s National Highway Construction Cost Index. Realistically speaking, a state would not oversee four multi-billion-dollar megaprojects all at once, so I spaced them out to begin construction (after environmental clearance) in 2025, 2028, 2031, and 2034. Assuming (another customer-friendly tolling principle) that toll collection started after each corridor was completed, the toll revenue would begin five years after the start of construction.

To verify that the toll rates would be enough to cover the construction costs plus the operating and maintenance (O&M) costs, I carried out a sketch-level traffic & revenue analysis. I used data from existing tolled Interstates to get average toll rates in today’s dollars of 7 cents per mile for light vehicles and 28 cents per mile for heavy trucks. The average projected annual vehicle miles traveled (VMT) growth rate for the 10 mid-size states was 0.91% for light vehicles and 2.0% for heavy vehicles. But since we know that a tolled highway will attract less VMT than a non-tolled highway, I used estimated diversion rates (for cars and for heavy trucks) to get net (i.e., tolled) VMT in each year from 2030 to 2060 during which the tolling would start and continue. And to cover O&M costs, I assumed 15% of gross toll revenue would be reserved for that, with 85% for debt service on the toll revenue bonds. The good news is that the net present value (NPV) of net toll revenue was within a few percent of the NPV of construction costs, showing that the toll rates are in the right ballpark for these projects to be toll-feasible.

Still with me? The final step was to estimate the fuel tax rebates needed each year for the light-vehicle and heavy-vehicle customers on the rebuilt corridors. For this I received valuable assistance from Ed Regan, recently retired from CDM Smith, who has been working with me on several projects dealing with the transition from per-gallon fuel taxes to per-mile charges. We drew on data from the Energy Information Administration on projected vehicle fuel economy and also data from Bloomberg New Energy Finance on projected electric vehicle market penetration. Those projections extend only to 2050, so I extended them conservatively to 2060. The result was a plausible estimate of the amount the generic state would spend on fuel-tax rebates from 2030 through 2060.

Now here’s the bottom line. The net present value of fuel tax rebates ($505 million) over this period is a mere 6.8% of the NPV of gross toll revenue ($7.45 billion) over the same period. To be sure, those $505 million are real dollars. But look at what the state gets in exchange. Per the assumptions and numbers in the study, it would not have to use any of its limited fuel tax revenues to either (a) rebuild all its aging rural Interstates, or (b) to operate and maintain them. All its remaining state and federal fuel tax monies would be available for all the other highways that are the state DOT’s responsibilities.

Note also that the way the study was done reflects all four of the customer-friendly state tolling principles:

1. Toll roads not used as cash cows: all toll revenue used for reconstruction plus O&M;
2. Reduced cost of toll collection: all-electronic tolling with incentives for prepaid transponder accounts;
3. Real value-added for customers: no tolls collected until a rebuilt corridor opens to traffic; and,
4. No double taxation: state fuel tax rebates.

There is no guarantee that a state’s adoption of these four principles would remove all opposition to toll-financed Interstate modernization. But they would remove the primary arguments typically made by opponents. And that could be worth a great deal.

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Politicians Can’t Fix Logistics Congestion, But They Can Make It Worse
By Marc Scribner

Snarled supply chains are causing anxiety for both producers and consumers and no relief is yet in sight. Most experts believe logistics congestion and input shortages are likely to continue through 2022. This reality has been slow to set in among the political class, which tends to view every problem as something to be fixed through public policy. President Joe Biden has appointed “czars” and held summits with business and labor leaders. Florida Gov. Ron DeSantis suggested that Florida’s ports could offer meaningful relief for California-bound container ships from Asia even though Florida’s ports have less than one-tenth the container capacity of California’s. But policy interventions could at best provide imperceptible relief in the near term while strengthening long-term supply chain resilience. Far more likely is that a dangerous combination of impatience and ignorance results in policies that prolong the congestion and reduce supply chain resilience.

The root cause of logistics congestion that has garnered so much public attention is the behavior of the public—specifically, the unprecedented surge in consumer goods demand during the COVID-19 pandemic. People stayed home and avoided activities involving strangers. Thanks in part to generous government assistance that kept personal incomes high, American consumers were able to maintain their personal consumption expenditures during the pandemic by substituting durable and nondurable goods for services (which were largely closed down).

E-commerce, in particular, exploded, with sales increasing by 32% between the first and second quarters of 2020 even though total retail sales declined by 4% during that period. While e-commerce sales had been rapidly rising in recent years, this demand shock dwarfed the previous e-commerce sales growth trend of roughly 2% per quarter. E-commerce retail sales today remain around 25% above the pre-pandemic trend and the nature of e-commerce plays an outsized role in our current logistics congestion.

Here’s a simplified story illustrating the cascading impacts of pandemic-induced changes in household consumption:

• The rapid flows demanded of e-commerce from production to distribution to end consumer caused warehouses already stocked with goods meant for pre-pandemic consumers to become congested as they attempted to adjust to pandemic-caused changes in goods demand.
• Because there was no space in the warehouses, goods were delayed in unloading from shipping containers on truck chassis in parking lots and loading docks outside the warehouses.
• Because warehouse parking lots and loading docks were overflowing with full containers and truck chassis, commercial customers were not picking up their containers and chassis from freight rail terminals and ports.
• Because those customers weren’t picking up their goods from rail and port terminals, carriers could not return empty containers and chassis to seaports and ocean carriers.
• Because seaports lacked the chassis to move containers out of ports to inland distribution centers, overflow storage quickly reached capacity at ports.
• And because there was no space in ports to unload containers from massive container ships, container ships waited for weeks offshore to unload their cargo.

Every hub and spoke of the logistics chain is strained due to this shift in consumption and spike in goods demand. Attempting to address one link, perhaps by moving to 24-hour schedules at ports as supported by President Biden, will not address problems in other parts of the chain and could possibly exacerbate them.

And it is understandably tempting for politicians to believe they can fix this problem with public policy because certain government policies made this situation worse than it otherwise would be. These policies include the failure to adopt international best practices and technologies at U.S. ports due to intransigent labor unions and their allied politicians, the duties on Chinese intermodal truck chassis that have tripled their price since 2018 under both the Trump and Biden administrations, and unprecedented “stimulus” and unemployment cash to households that kept Americans spending at record levels, among others.

Smart reforms could improve the long-run resilience of the supply chain, although the damage from past irresponsible policies has already been done and cannot be quickly reversed. Because the main source of our current troubles is unusual short-run consumer demand, public policy is ill-suited to help. What is most concerning is the very real possibility of impatient politicians misdiagnosing the problems and proposing policies that will exacerbate them.

The Ocean Shipping Reform Act of 2021 (H.R. 4996), introduced by Reps. John Garamendi (D-CA) and Dusty Johnson (R-SD), has already garnered the bipartisan support of dozens of members of Congress and provides an example of the combination of impatience and ignorance threatening to prolong the supply chain crisis. Among other misguided regulatory provisions, the bill would crack down on detention and demurrage fees charged to customers who are late in returning or late in picking up containers.

Detention and demurrage charges incentivize customers to keep shipping containers flowing, rather than using them as overflow warehouse storage as many are currently doing. These charges are one of the few tools available to carriers to maintain container velocity. Bizarrely, H.R. 4996 would increase logistics congestion when it is already at its worst. But the bill represents something and politicians are inclined to do, so dozens of cosponsors have signed on even though few if any understand what the key provisions actually mean or would do.

Despite assurances from politicians, there are no quick and painless ways out of this strange supply chain situation, which is largely yet another unpredictable consequence of a 100-year global pandemic. Instead, we must accept these difficulties for the time being, be vigilant about well-meaning but counterproductive policy responses, and work to improve long-run supply chain resilience by jettisoning existing harmful government policies.

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Trucking Study Urges EVs to Pay by the Kilowatt-Hour, Not by Mile

As was made pretty clear by a methodologically challenged report released in March 2021, the trucking industry research arm American Transportation Research Institute (ATRI) does not like the idea of mileage-based user fees as a replacement for fuel taxes. As I pointed out in an article in this newsletter (“How Not to Win Support for Mileage-Based User Fees,” April 2021), the ATRI report downplayed the extent of the forthcoming fuel tax revenue decline and used extremely high cost-of-collection figures to portray mileage-based user fees (which it calls a vehicle miles traveled, VMT tax) as far too costly to be taken seriously.

I’m pleased to report that ATRI’s latest contribution on this subject admits that electric vehicles (at least for personal vehicles) are being sold in larger numbers, encouraged by increasing federal and state subsidies and that it’s important that electric vehicles (EVs) pay their fair share of the costs of building and maintaining highways. So far, so good. But instead of conceding on charging EVs per mile, in this new report ATRI’s Jeffrey Short and Danielle Crownover make a case for charging EVs per kilowatt-hour for the “electric fuel” they use. (“Electric Vehicles and Infrastructure Funding, Technical Memorandum,” September 2021, available on request from TruckingResearch.org.) Electrified trucks are not mentioned at all.

In a useful table, the report identifies states that charge an annual registration fee of greater than or equal to $100 for EVs (21 states) and those that do not charge anything different for EVs (23 states), plus seven others that charge other annual EV fees. But the authors also point out that a flat annual fee bears no relation to the amount of highway use. After a quick recap of the previous ATRI study rejecting “VMT taxes” as far too costly, the second half of the 30-page report makes their case for charging all EV users for the kilowatt-hours used. This turns out to be not so easy.

They explain the three types of chargers now in use: Level 1 (very slow, 120V), Level 2 (faster, 240 volts), and Level 3 (much faster, 480V). The first is typical in people’s garages, where it plugs into an ordinary electric outlet. Level 2 chargers are currently used mostly at public charging sites. Level 3 (DC fast charging) is far more costly and is not available for residential use. They suggest that it would be relatively easy to collect an electricity tax from public charging stations, which are essentially businesses. But they exaggerate the scale of the problem with residential charging by claiming that 80% of US electricity is consumed at residential locations. It’s actually about 38% (with 36% commercial and 26% industrial). Even so, they admit that collecting an electric fuel tax from residential EV charging is “more challenging.” They laud the growth of smart meters and time-of-use electricity rates, but some way to distinguish kilowatt-hours used to charge the Chevy Bolt from all other electricity uses is going to be a real problem.

Apart from the difficulty of actually charging all EV users, there is also an equity question which the report does not address. Smart meters, time-of-use rates, and the ability to identify when the Level 2 charger is operating (and how much it’s delivering) are likely to be chosen by more-affluent people, leaving others paying household rates for their 120V plug-in Level 1 chargers—which the electric utility will not know they have. The report suggests a Big Brother system of matching the Vehicle Identification Number of each EV with an electric utility’s customer database in order to catch non-payers. The report also assumes that every home Level 2 charger will be installed with a proper electrical permit (which the electric utility could access), but in some parts of the country, lots of electricians are willing to do jobs without permits. Acknowledging some of these difficulties, the report then suggests that a flat fee approach may be needed for those without a smart charger, while admitting that this would be “not purely a user-pays tax.”

In short, while this is an interesting alternative, the ATRI report points out numerous problems with implementation, which belies its optimistic estimates of how soon an overall electricity fee covering all EVs could be implemented.

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Ridehailing Companies: Hype vs. Reality
By Baruch Feigenbaum

Ridehailing companies like Uber and Lyft promised to transform transportation by creating self-driving vehicles, ending private car ownership, reducing congestion, and enhancing public transit. A new opinion piece in The New York Times, titled “For Uber and Lyft the Ridership Bubble Burst” by Greg Bensinger finds that Uber and Lyft have failed to deliver on some of those promises and may soon fail as businesses. Bensinger makes some valid points.

For example, I agree with Bensinger that ridehailing companies promised that by 2021 the majority of rides would be in automated vehicles (AVs). Many believe that ridehailing’s long-term business model requires automated vehicles since there are not enough people willing to moonlight as drivers. Further, paying the drivers is an obstacle to profitability. In reality, ridehailing companies fell victim to the Gartner-Hype cycle, which describes the phases in which technology develops. The companies grew rapidly during the peak of inflated expectations and believed AVs would be widespread by 2021 when that was never realistic. Uber sold its AV business in 2020 amid mounting development costs. Lyft also backed off its AV development, selling much of that business to Toyota earlier this year.

The companies promoted ridehailing as a profitable business model. Yet, without automated vehicles, both companies continue to hemorrhage money. In 2019, Uber lost $8.5 billion; last year by offering food delivery during the COVID-19 pandemic the losses dropped to $6.8 billion. Lyft did better, but still lost $4.4 billion over the two-year period. And the companies are not exactly winning on Wall Street. Some Lyft investors have lost money, while some Uber investors have made a tiny profit, making both companies poor investments at a time when the overall market is offering annual double-digit gains.

Another ridehailing company promise was to end car ownership. Clearly, this is not something that will happen in a few years, if ever. The trend is Americans buying more cars, not fewer. Millennials are buying more cars per capita than other cohorts, largely because they have had far fewer cars per capita than other cohorts. Shared, automated, electric vehicles are a long-term policy possibility but it’s unclear if ridehailing companies will control the market. Today’s high cost of taking a ridehailing service to everyday activities—the grocery store, the health club, the bank, the escape room—makes ditching vehicle ownership very challenging.

Uber and Lyft also claimed that they would increase carpooling via UberPool and LyftLine. Despite 50 years of policy providing incentives such as high occupancy vehicle lanes, developing carpools has been challenging. For ridehailing companies the hope was that customers traveling from the same origin to the same destination would share a ride if the price of a carpool was less than half the price of a solo ride. Carpool numbers were increasing, and then COVID arrived decimating all forms of shared rides. Post-COVID some riders will be willing to carpool for a modest discount, while others won’t be interested at any cost. I’d grade this claim as incomplete.

Some of Bensinger’s other claims may be more ideologically motivated. Supposedly, ridehailing vehicles cause congestion by circling the block looking for passengers. It is possible that traffic congestion worsened in dense cities such as New York and San Francisco. If congestion is really the problem, however, implementing cordon or congestion pricing is a straightforward solution.

Ridehailing companies also promise to reduce greenhouse gas emissions (GHGs) but Bensinger is skeptical, citing a study that shows since deadheading (driving without a passenger) accounts for 40% of all ridehailing mileage, it leads to a 20% overall increase in greenhouse gas emissions compared to driving a personal vehicle. What the study doesn’t do is compare ridehailing services to taxis, which have a higher average age and emit more GHGs per vehicle. If someone uses a ridehailing vehicle instead of a taxi, on average per capita GHG emissions fall.

More importantly, over the long term, the number of electric vehicles is expected to increase rapidly in the ridehailing fleet. And the above study looked at only six cities, none of which were New York City or Los Angeles, the two largest in the country. The evidence that ridehailing increases emissions is mixed at best.

Bensinger also repeats the fashionable claim that ridehailing is a significant drag on public transit. Transit’s usage was declining pre-pandemic, but this was largely due to transit poorly serving suburban destinations and the poor quality of service on many large subway systems. From 2018 to 2019, the Washington Metropolitan Area Transit Authority (WMATA) actually saw an increase of ridership, bucking the long-term trend of a decrease, despite massive growth in ridehailing in the city. WMATA’s increase occurred because the system finally appeared to have reached a state of good repair.

But the heart of some of the frustration with many on the political left is how ridehailing companies categorize their drivers. The California legislature passed Assembly Bill 5 that defined ridehailing drivers as employees. A ballot amendment overturned the bill, but many in organized labor believe ridehailing companies are skirting labor laws. Yet, most ridehailing drivers are part-time. Driving for Uber or Lyft isn’t their primary job, and they don’t want it to be. They are happy to be paid as contractors. The real aim of bills such as AB 5 is to unionize driver employees, which might have the unintended consequence of driving Uber and Lyft out of business. This would make taxis a monopoly and increase prices for riders.

Ridehailing companies have over-promised and underdelivered in some very important areas. I don’t know if ridehailing companies need automated vehicles to financially survive over the long term, but companies like Uber and Lyft provide a valuable service that should not be regulated out of existence as we continue to learn and see what the future holds.

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New Study: Cars Could Lift Poor Americans Out of Poverty

The headline on a 2019 Bloomberg City Lab article raised many eyebrows: “As the Planet Warms, Who Should Get to Drive?”. The study in question was researched and written by David A. King, Michael J. Smart, and Michael Manville and appears in the Journal of Planning Education and Research as “The Poverty of the Carless: Toward Universal Auto Access.” They find that while the costs of acquiring and using a car are difficult for the lowest-income households, a growing body of evidence suggests that having a car makes a large difference in employment and hence increased income. They conclude that, going forward, “planners should see vehicles, in most of the United States, as essential infrastructure and work to close gaps in vehicle access.”

The evidence on this has been accumulating over the past decade or two. A Brookings study last decade found that in the 10 largest U.S. metro areas, less than 10% of jobs could be reached within 45 minutes by public transit. And 36% of entry-level jobs are completely inaccessible by transit, which is not that surprising given that about two-thirds of new jobs are in suburbia.

A UCLA study several years ago found that between 2006 and 2016 the share of no-vehicle households at the poverty level decreased from 22.02% to 19.96%, driven in part by the availability of more-affordable used cars (unlike today’s market). In addition, record levels of auto loans also helped. But UCLA transportation researcher Evelyn Blumenberg told Daniel Vock of Governing that “Most low-income households are not taking out loans to buy a car. They’ll pick up a car from a friend or get one from Craigslist when they get an influx of money, like a tax refund.”

Blumenberg has been researching the job-access benefits of cars for low-income people for many years. “Research shows there’s a very strong relationship of having a car and likelihood of getting a job. For lower-income households, it’s really beneficial to have access to a car,” she told Vock. She also pointed out that poor families are migrating to the suburbs, and to get around there—to a job or anything else—requires a car. A 2014 study by the Urban Institute found that among families getting federal housing vouchers, those with vehicles were more likely to move to neighborhoods with less poverty, better schools, and more-available jobs.

There are several alternative ways to connect low-income households with vehicles. One is car loans offered without a down payment by entities such as Ways to Work. A number of charities (such as Charity Cars in Florida) encourage people to donate no-longer-essential cars that can be given or leased to low-income households.

The most important policy question going forward is whether the benefits of car access for low-income households outweigh trendy government policies that focus on reducing vehicle miles of travel as a key component of dealing with greenhouse gas reduction. Michael Smart, one of the authors of “The Poverty of the Carless” told Bloomberg that policymakers have to be able to pursue two objectives at the same time. “We don’t want to try to balance our carbon emissions and budget on the backs of the poor. All of these goals can be achieved if overall we drive less, even if we help some people drive more.” While I agree with the sentiment, I think the marginal increase in CO2 emissions from a tiny fraction of the population gaining access to vehicles is trivial, especially in the context of the ongoing trend toward lower-emission conventional vehicles and a rapid increase in zero-emission electric vehicles.

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Assessing the Future of Urban-Area Parking
By Baruch Feigenbaum

Over the last 30 years, developers have been building a declining number of parking spaces. The COVID-19 pandemic disrupted the demand, need, and approach to parking. Two recent articles, “No Parking: Cities Rethink Garages for a World with Fewer Personal Cars,” by Scott Calvert in The Wall Street Journal and, “Parking’s Back As an Office Amenity Post-COVID,” by David Levitt in The Commercial Observer, examined how parking needs may change in a post-COVID world.

Before diving into the articles, I want to provide a brief history of U.S. post-World War II parking policy. In the 1950s and 1960s, almost every new development was surrounded by copious free parking.  Suburbanization was in full swing. Many residents were moving out of cities like New York City and Chicago, places where there was never enough parking, and influenced by those experiences there was no such thing as too much parking to them. 

When most large cities and suburbs created their development codes, they set minimum parking standards based on the Institute of Transportation Engineers (ITE) parking generation manual. The minimum standards often required far more spaces than were necessary. For example, shopping mall parking minimums were calculated based on demand on the fourth busiest shopping day of the year. For the other 361 days of the year, shopping malls try to make use of that extra asphalt by hosting stands that sell products such as fireworks or firewood.

The ITE guide had “standards” for every possible type of residential development. Multiple-family units and single-family dwellings both required two spaces. Commercial developments were more complicated; churches, dry-cleaners, department stores, banks, and grocery stores all had specific rules. There were even different standards for strip clubs with partial- and full-nude dancing. And I wonder who did the research for those establishments!

Further, the standards were not exactly based on sound statistics. Since there were so many categories, a number of the required minimum parking standards were based on fewer than five data points, with one based on only two observations. That recommendation came with the warning, “low r-squared,” which seems like an understatement.

Fast forward to the 2000s when denser development came into vogue. Many potential multi-family apartment buildings did not have sufficient space for the minimum parking standards without building a costly parking garage. On the other hand, industrial brownfield sites that could be redeveloped into mixed-use commercial projects would not be profitable with minimum parking.

In the 2010s, many governments started examining how automated vehicles would affect demand for parking. Since Society of Automotive Engineers (SAE) Level 4 automated vehicles can drop off passengers in the center of developments and then drive themselves to less-valuable real estate, many developers are planning new developments with parking located on the periphery.

With these changes, developers pressed city leaders to eliminate parking minimums, and not require parking in a specific location. In the past 10 years, many cities eliminated parking minimums and some imposed parking maximums.

Over the last 18 months, the COVID-19 pandemic has obviously upended commute modes. Almost all white-collar employees began working from home and only about 50% have returned to offices. Many transit choice riders switched to driving and, due to limited service and other issues, many commuters have not returned to mass transit.

Given post-COVID uncertainties, this is a challenging time to predict the future of mass transit, but both writers take their best guesses. Levitt argues that the demand for parking will increase. And since creating new parking garages is very expensive in most downtowns, the strategy is to better use existing facilities.

Smart parking solutions, which were growing pre-COVID, will be more important in the future. Apps such as SpotHero that allow drivers to pay for and reserve parking ahead of time, typically for a lower price, are an option for drivers. Flash Parking is working on an interactive app that allows drivers to ask their car’s infotainment system for the closest empty parking spot. For drivers apprehensive about human contact due to COVID, Spaces USA provides touchless parking where customers dial a number at the entrance and/or exit to pay.

In contrast, Calvert expects parking demand to decrease. His article cites the use of e-bikes, e-scooters, and lower car ownership as reasons why, over the next 20 years, the demand for parking could drop by one-third. Street parking and underground garages will be eliminated while surface garages will decrease. In order to accommodate the expected decrease in demand, some developers are building parking garages that can be redeveloped as residential properties.

Similar to Levitt, Calvert predicts easier ways to manage and pay for parking. But he also predicts more multimodal garages that house e-scooters, ghost kitchens, fitness centers, and shared automated electric vehicles.

Overall, Levitt is focused on the near future detailing how COVID-19 has changed peak parking demand and made payment technologies more widespread. Calvert is focused more on the longer term. But his prediction of a one-third decrease in parking demand seems unlikely to me. Building parking garages that can be repurposed might be a smart decision for a long-term asset, but all those shared automated vehicles will need to park somewhere. And that somewhere figures to be in garages, especially in dense cities like New York City.

For an industry that changed little over 50 years, parking is undergoing a transformation. In 2000, parking garages were staffed by an attendant and only took cash. Today, customers can prepay for an automated garage using a credit card. Parking garages of the future might not provide ghost kitchens, but they will continue to evolve. 

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News Notes

$8.3 Billion Australian P3 Highway Project Financed
The long-term public-private partnership for the $8.3 billion North-East link project reached financial close in late October. The project will be financed, developed, and operated by the Spark consortium, led by UK company John Laing. The Melbourne metro area project will link two existing motorways via tunnels, while also completing the M80 and upgrading the Eastern Freeway. It will also add 25 km of new and upgraded cycling and pedestrian paths.

Toll Projects Regaining Traffic as COVID Fades
P3 developer-operator Cintra reported late last month major traffic improvements on its toll-financed facilities in North America. In Texas, traffic on both the LBJ and NTE express toll lanes in the Dallas/Ft. Worth metro area are now above 2019 levels. Highway 407 ETR in the Toronto metro area resumed growth after mobility restrictions were partially eased in June. And traffic in the I-77 express toll lanes in the Charlotte, NC metro area was up 39% and had regained pre-COVID levels by the end of June.

California Expands MBUF Program
Under recently approved legislation, California has begun signing up volunteers to pay a mileage-based user fee instead of the state gas tax.  Participants can report their miles driven either via odometer readings or GPS. They will receive refunds for the gas taxes incurred while driving those miles. Despite this revenue-neutral approach, populist opponents denounced the plan. State Senate GOP leader Scott Wilk said “Commuting is a necessity in my district, and a per-mile tax would be a huge blow to middle-class families.” Don’t these guys read the bills they pass?

New Technology Captures CO2 from Heavy Trucks
A start-up company called Remora is testing a device attached to the tailpipes of the tractors of 18-wheel big rigs, aiming to capture up to 80% of their CO2 emissions (which it plans to sell for re-use). The concept was developed as a PhD dissertation by company chief science officer Christina Reynolds. Signed up for the test program are ArcBest Corp., Cargill NFI Industries, Ryder System, and Werner Enterprises. Freight transportation, including trucking, accounts for 12% of all U.S. CO2 emissions, according to a study from the Brookings Institution.

Tax Credits for Union-Made EVs Draws Fire
One of the provisions in the pending federal “reconciliation” bill to subsidize electric vehicles provides for an additional $4,500 tax credit for EVs made in the United States in unionized plants. I critiqued this as contrary to the Biden administration’s climate goals because the vast majority of EVs will be made in non-union plants by both traditional Detroit-based auto companies and all the U.S. plants of non-U.S. companies. Now Reuters reports strong opposition from the European Union and many other countries with large-scale auto industries. A letter from 25 ambassadors sent to the Biden administration on October 29 asserts that “limiting eligibility for the credit to vehicles based on their domestic assembly and local content is inconsistent with U.S. commitments under WTO multilateral commitments.”

Virginia Express Toll Lane Project Moving Forward
Virginia DOT and Transurban have finalized a comprehensive agreement for the $600 million I-495 NEXT project. It will extend the I-495 express toll lanes north by 2.5 miles, with new connections at the Dulles Toll Road and the George Washington Memorial Parkway. Transurban has selected Lane Construction as its design-build contractor, and financial close is expected in December, Inframation News reports. Financing plans include Private Activity Bonds and a TIFIA loan.

Brightline California-Nevada Project Moving Forward
Two new developments move the original Las Vegas to Victorville (CA) project a bit closer to actually serving Los Angeles. Last month the company signed an MOU with three California transportation agencies under which it will be able to use 48 miles of right of way on I-15 between Victorville and Rancho Cucamonga to extend its line southward. And the San Bernardino County Transportation Authority is planning a grandiose Cucamonga Station that will serve commuter rail line Metrolink, the planned Brightline extension, and an underground tunnel to Ontario International Airport. No cost estimate or funding plan for this station has been announced.

New I-49 Now Open for 290 Miles
The long-planned I-49 is to link southern Louisiana, via Arkansas, Kansas City, MO, where it will connect with north-south I-29 to the Canadian border and Winnipeg. Last month saw the opening of what had been a five-mile gap between Arkansas and Missouri. With that gap closed, the corridor is now open for 290 miles. Including the northward section of I-29, the overall I-29/I-49 corridor will be 1,600 miles long.

Insurers Seek Permission for Driver-Performance Rate-Making
The Wall Street Journal reported that Allstate Corp. has become a leading advocate of using measured driver performance as a key factor in setting car insurance rates, reducing or eliminating dependence on credit scores and demographics. Allstate and Progressive have been using telematics data (with drivers’ permission) for many years as a factor in setting rates. Car insurance rates are set by state agencies, so the industry must deal with 50 state governments. The WSJ article reported an estimate that fewer than 4% of the country’s 210 million personal auto insurance policies make use of driver-performance data, according to the National Association of Mutual Insurance Companies.

Deloitte Sees EVs Leading to Mileage-Based User Fees
The chief economist of consulting firm Deloitte, Ian Stewart, laid out his rationale for seeing the transition to electric vehicles as leading to a shift from fuel taxation to mileage charges. The piece appeared in the October 25 issue of Deloitte Monday Briefing. Stewart reasons that economic forces will reinforce governmental pro-EV policies, especially once the ownership cost of EVs becomes lower than that of conventional vehicles: “As goods and services become cheaper, people consume more of them.” And he sees it as obvious that, “Charging drivers for road use would solve [both] the congestion and the revenue problems.”

First Projects Launched for I-69 Toll Bridge
The Kentucky Transportation Cabinet has requested technical and price proposals from companies to design and build some of the roadway structures for the I-69 Ohio River Crossing project. KYTC has narrowed down contenders to three prequalified teams, with proposals due November 15 and selection to be via a best-value approach.

Supreme Court Rejects Truckers’ Appeal on Indiana Toll Road Tolls
The U.S. Supreme Court on October 15 denied an appeal from trucking groups whose argument that a 35% toll increase on trucks using the toll road discriminates against Interstate commerce. The truckers had lost at both the Circuit Court and District Court levels, with those courts arguing that roads are not inherently a state function and there are also alternative routes, so the state could permit the rate increase. The Supreme Court declined to hear the appeal.

BART San Jose Extension Now to Cost Twice Original Estimate
Federal Transit Administration experts now expect the final cost of the four-station, six-mile extension of BART into San Jose to cost $9.1 billion. At the same time, FTA announced it was allocating $2.3 billion in federal aid to the project—or a quarter of the final cost, whichever is less. Only three years ago, the Valley Transportation Authority estimated that the project would cost $4.7 billion and be completed by 2026; the new completion date is 2030.

Average Vehicle Age Now 12.1 Years
Since 2001 the average age of personal vehicles has increased from about 9.6 years to a new high of 12.1 years, according to research by data firm IHS Markit. Today’s vehicles are better built, and have much longer warrantees than previous generations, so they are more likely to go through several owners and last for as many as 200,000 miles. That is negative news for those expecting a speedy shift from internal combustion engine cars to electric and autonomous vehicles.

Hyperloop Test Track Planned in Colorado
Swisspod, in cooperation with a subsidiary of the Association of American Railroads, has announced plans to develop a hyperloop test track at PuebloPlex, a 15,847-acre industrial development site. Swisspod intents to test what it terms a unique propulsion system for its planned hyperloop pods.

Chinese Solar Panels and Coal Use
A majority of solar panels being installed worldwide are made in China. Unfortunately for the environment, most of them are produced using electricity from coal-fired power plants. An August 2 Wall Street Journal article quotes Cornell engineering professor Fengqi You as estimating that a solar panel made in China creates twice as much CO2 as one made in portions of Europe.

Newspeak from Florida DOT
After coming under some degree of criticism for embracing concepts such as “complete streets” and “road diets” which generally reduce traffic lanes in favor of either transit or bike/walking, Florida DOT’s Systems Implementation Office has renamed its former Complete Streets Guidebook. It is now known as the “Lane Repurposing Guidebook.” I guess that is a step toward honesty about what is really involved. An illustration on the cover shows before/after renderings of a three lanes each way arterial converted to two lanes each way. This is an especially telling example, since most six-lane arterials in Florida are key adjuncts to the limited-access highway system whose very being is to serve autos, buses, and trucks, not bicyclists and pedestrians.

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Quotable Quotes

“[U]ser fees can play an important role in financing both new infrastructure projects and in maintaining existing ones. User fees are often ruled out in the policy process because they are claimed to be regressive. More honestly, they are politically difficult. Yet fees for vehicle miles traveled that vary by time of day, for parking in dense urban areas, for the use of airports and ports, and many other user charges can reduce the demands that an infrastructure program places on general revenues. If set to reflect the marginal cost of using infrastructure, they also represent an important step toward its efficient utilization. While there are many justifications for investing in infrastructure, there are few compelling reasons for making such infrastructure free to users, especially since that will lead to utilization above and beyond the efficient, cost-reflective level.”
—Edward Glaeser and James Poterba, “Economic Perspectives on Infrastructure Investment,” Aspen Economic Strategy Group, July 14, 2021

“Jobs are suburbanizing, poverty is suburbanizing, and people are living in very dispersed environments—which makes accessing those jobs by modes other than a car really difficult and time-consuming. . . . It’s a touchy subject in transportation circles, where funds are focused on increasing access to public transit, even though poor people more than anyone need the flexibility and mobility of having a car. Unfortunately, in almost every single neighborhood context, public transit does not provide the same job opportunities as having an automobile.”
—Evelyn Blumenberg (UCLA), in Martine Powers, “Trump’s Welfare Reform Plan Misses a Key Piece: Transportation,” The Washington Post, May 12, 2018

“We need to focus on the most cost-effective methods for reducing climate pollution even as we take on the challenge of moving from a mostly fossil-fuel-powered world to a clean global economy.”
—Fred Krupp (Environmental Defense Fund), “Methane and Other Climate Bargains,” The Wall Street Journal, Nov. 2, 2021

The post Surface Transportation News: Dealing with ‘double taxation’ on tolled Interstates, the supply chain mess, and more appeared first on Reason Foundation.

• Rhetorical war on freeway expansion
• Misinformation on proposed per-mile charge
• Trucks as leading candidate for automation
• Transit’s near-term future
• Are electric cars less costly to maintain?
• Maryland toll lane opponents protest bottlenecks they caused
• News Notes
• Quotable Quotes

Rhetorical War on Freeway Expansion Escalates

Three recent articles illustrate the ramped-up efforts of many transportation advocates to discredit the expansion of congested urban freeways. There are many others, but these stories, in particular, caught my eye:

• “Democrats Look to Crush States’ Highway Habit,” Sam Mintz, Politico, July 16, 2021, about the now-dropped House INVEST in America Act;
• “How a Quality of Life Award for a 12-Lane Utah Highway Sums Up the Debate Over the Future of Transportation,” Ian Duncan, The Washington Post, Sept. 24, 2021, criticizing AASHTO’s award for UDOT’s I-15 widening in Lehi, UT; and,
• “The Unstoppable Appeal of Highway Expansion,” David Zipper, CityLab, Sept. 28, 2021, blasting plans to widen I-35 through downtown Austin.

The common themes in all three pieces are that state departments of transportation (DOTs) reflexively build more highway capacity instead of assisting cities to expand transit, biking, and walking; that widening freeways is treated as futile (the alleged iron law of freeway congestion); and that highways are and forever will be a major source of greenhouse gas (GHG) emissions and must be stopped from expanding on that premise.

I have written a critique of the leading academic paper that attempts to demonstrate the “iron law” that adding lanes to congested freeways is futile since they soon fill up with “induced demand.” That paper has methodological flaws and anti-highway people exaggerate what it actually claims. Much of what happens when a freeway is widened is explained by latent demand—trips that were previously made on other roads or by other modes that shift to the expanded freeway when it becomes available because the freeway is now a better alternative.

Another point generally ignored by anti-highway groups is the difference between fast-growing and slow-growing metro areas. The Central Florida Expressway Authority (funded by tolls) in June announced a five-year construction work plan totaling $3.2 billion, as it tries to keep pace with the extraordinary growth of the Orlando metro area. This is not a case of “If we build it, they will come.” Instead, it’s, “They keep on coming and are willing to pay for better mobility, so we’re going to keep building it.” I see nothing wrong with that.

In both the Utah (UDOT) and Austin (TxDOT) cases, the problem is that explosive urban growth has led to the freeway through downtown becoming a bottleneck, and that bottleneck risks harming the area’s economy. In Utah, Lehi is becoming a high-tech hub (“Silicon Slopes”), and the four miles of I-15 running through the city had not been widened since that portion of the Interstate was built decades ago. Local businesses campaigned hard for UDOT to fix the bottleneck by widening that stretch of I-15 to handle the much-increased traffic demand. The $415 million project added a lane in each direction, added frontage roads to assist local travel, provided access to a transit hub and a system of trails, and added pedestrian crossings. My only critique of this worthwhile project is that the additional freeway lanes should have been opened as express toll lanes, like those on I-15 in the Salt Lake City metro area.

In Austin, various plans have been produced for adding lanes to the I-35 bottleneck in this rapidly growing high-tech community (which is also the state capital). The best approach would be to emulate the successful express toll lanes project on the LBJ (I-635) freeway in Dallas. In that case, TxDOT had pledged, during a previous widening project, that there would be no further widening in the future. But with the growth of Dallas traffic, adding express toll lanes offered many benefits. The way to add them without widening the right of way was to dig a trench in the median of the right-of-way for the new express toll lanes (ETLs) and then rebuild the main lanes, cantilevered over the express lanes. That solution is tailor-made for I-35 in Austin, where there is large opposition to widening the highway (property takes) and also to elevated lanes (noise). The only problem with this solution is the Texas Legislature. Due to the election in recent years of anti-toll populist conservatives, TxDOT is forbidden to use tolling on any new project. And the legislature’s last three biennial sessions have failed to approve any proposed long-term public-private partnership (P3) projects, which is how the innovative LBJ express lanes project was financed and developed.

Another point that anti-highway advocates ignore is road pricing. Both Anthony Downs, who first wrote about the potential futility of freeway expansion, and Duranton and Turner’s paper that is portrayed as introducing the “iron law of freeway congestion,” have acknowledged that road pricing fundamentally changes the situation, providing a way to bring demand and capacity into some kind of balance. An honest debate about expanding urban freeways should always include the potential of pricing.

In previous issues of this newsletter, I have addressed the implicit assumption that highways are and always will be a major source of GHG emissions. Urban highway megaprojects projects being discussed today will take years to get through the planning process and more years to build. Federal policy, and the worldwide auto production industry, are committed to replacing internal combustion engine (ICE) vehicles with electric vehicles (EVs) by 2035 or so. As ICE vehicles wear out and are replaced by EVs, projections by Bloomberg New Energy Finance suggest that by 2050 EVs may well constitute 50% of all U.S. light vehicles (cars, SUVs, pickup trucks), and perhaps 62% by 2060. Long-range transportation planning must take this transition into account, rather than planning future transportation based on yesterday’s vehicle technology.

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Combatting Misinformation about the Senate’s MBUF Pilot Program
By Marc Scribner

A viral image circulated on social media suggested that the Senate-passed Infrastructure Investment and Jobs Act contained a new “driving tax” “estimated to be 8 cents per mile.” In reality, mileage-based user fees (MBUFs) are not mandated by the Senate’s infrastructure bill. The all-volunteer pilot program that is actually proposed would charge test participants some undetermined amount but then refund the participants each quarter. The false claim, originally made by populist-conservative Newsmax TV, triggered Facebook fact-checking partner PolitiFact of the Poynter Institute to flag it and publish an article correcting the record. Reason’s Bob Poole and Adrian Moore were both interviewed for the Facebook/PolitiFact corrective. Similar fact-checks reaching the same conclusion were later published by the Associated Press and USA Today, among others.

To understand what the MBUF program contained in the Senate bill does and doesn’t do, it’s important to review the legislative text. Section 13002 of the Infrastructure Investment and Jobs Act would establish a national motor vehicle per-mile user fee pilot. The three stated objectives are to test the MBUF concept, address the need for additional surface transportation revenue, and provide recommendations for implementing a federal MBUF in the future.

Participants are to be exclusively volunteers who get to choose between a variety of mileage recording devices that span the privacy/auditability continuum. In establishing a revenue collection mechanism, the Treasury is instructed to authorize independent and private third-party payment collectors that would then forward revenue to the Treasury, meaning the volunteer participants will be able to ensure that the government never accesses their individual mileage data. Further, subsection (m) explicitly requires the Treasury to pay volunteer participants for their estimated miles-driven each quarter. This amounts to a revenue impact of zero (and negative when you consider the program expenses).

This is all spelled out in relatively plain language in the text of the bill. It’s hard to see how any fair reading of the Section 13002 MBUF pilot program could lead one to believe this would constitute a new “driving tax,” especially when the effective rate would be zero due to the quarterly refunds made by Treasury to volunteer participants. This makes the “estimated to be 8 cents per mile” part of Newsmax’s false claim especially bewildering.

It’s unclear where Newsmax sourced the 8 cents per mile figure, or if it was sourced at all. While participants might face different per-mile rates based on the specific vehicle model they enroll in the pilot, the specific rates have yet to be determined. But a back-of-the-envelope calculation suggests Newsmax was off by an order of magnitude. Preliminary data from the Environmental Protection Agency suggest Model Year 2020 light-duty average fuel economy is 25.7 miles per gallon. The current federal excise tax on gasoline is 18.4 cents per mile. Thus, the light-duty fleet average per-mile rate is 0.72 cents per mile for the intended revenue-neutral replacement of fuel taxes.

Some might argue that the threat is whatever amount is beyond a revenue-neutral breakeven rate, from politicians seeking to tax Americans out of their cars. However, the idea that Congress will have an easier time raising a possible future MBUF than they have in raising federal fuel taxes is unsupported. While the vast majority of states have raised their fuel taxes in recent years to account for construction cost inflation, the federal fuel tax rates of 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel have remained unchanged since 1993. Even a doubling of the MBUF fuel tax equivalent rate, which is equally as unlikely as a doubling of the federal gas tax, would result in a light-duty fleet average of less than 1.5 cents per mile.

To be sure, if this federal MBUF pilot program is enacted, the Departments of Transportation and Treasury will need to work hard to get it right. My Reason colleague Bob Poole warned in the August issue of this newsletter (“Bipartisan Infrastructure Bill: The Good, the Bad, and the Ugly,) that “if incorrectly tested and implemented, the new federal program could easily be termed ‘yet another tax increase’ by many, including opponents looking to prevent an eventual shift from gas taxes to mileage-based user fees.”

It is both sound policy and politics to develop and promote MBUFs as a superior replacement, not a tarnished supplement, to fuel taxes. If they wish to see them eventually implemented, MBUF advocates must resist efforts to treat motorists as piggy banks.

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Why Trucks Are Likely the Best Near-Term Candidate for Autonomy

The last few years have made it clear to most researchers on autonomous vehicles (AVs) that the original vision of go-anywhere, on any kind of road, in any kind of weather, with no driver or controls (i.e., SAE Level 5) is a long way off. The problems inherent in having all the needed kinds of sensing technology, fusing their information for instant decision-making, and actually replicating how a human driver reaches decisions are far from being solved. Hence, much of tech companies’ efforts today are on SAE Level 4 autonomy—no need for a human driver on some kinds of roads, in some kinds of weather, with backups of some kind available for situations that the artificial intelligence (AI) cannot handle.

When I first started reading and writing about AVs, I discovered the work of Steve Shladover of UC Berkeley, whose AV research goes back decades. In my book, Rethinking America’s Highways, I cited his seminal 2016 Scientific American article, “The Truth About ‘Self-Driving’ Cars,” which warned against much of last decade’s hype on the subject. So I was pleased to read his latest article on the subject in the same magazine, “’Self-Driving’ Cars Begin to Emerge from a Cloud of Hype.” In the article, Shladover explains the reasons why Level 4 is the best we can expect in the foreseeable future, and what it will take to get even that far. A very important point is that, “Even when ADS [autonomous driving systems] are able to drive vehicles without an onboard human driver as a backup, they will still need remote support from humans who are skilled drivers to handle ‘corner case’ conditions that the automation cannot handle.”

After laying all this out, and noting that there will be a lot of embedded costs, he suggests that these likely expenses “drive the business case for initial ADS deployment on commercial vehicle fleets that can be used throughout the day [and night?] to generate revenue.” And he reasons that commercial fleets are also more likely to be able to provide remote support for vehicles when needed (such as when an 18-wheel big rig gets a flat tire in the middle of the night on a rural Interstate). He suggests that the initial enthusiasm for urban ride-hailing services as the likely first large-scale use of ADS is not likely to pan out, since dense urban areas “are the most technologically challenging environments for ADS”—in contrast to long-haul trucking on Interstate highways.

My reading this year in FleetOwner and other freight media suggests that tech companies, truck manufacturers, and trucking companies are making serious strides in this direction. Six startup tech companies are focused on developing ADS for trucks: Aurora, Embark Trucks, Kodiak Robotics, Plus, TuSimple, and Waymo Via. Four of these, which are publicly traded as of this year, are together valued at $26 billion, according to The Wall Street Journal. Rather than designing and building their own trucks, these companies are developing ADS packages to integrate into existing Class 8 trucks (over-the-road 18-wheelers) from producers such as Daimler Trucks, Kenworth, Navistar, and Peterbilt. And they are working with major trucking companies including FedEx and J.B. Hunt hauling actual freight on Interstates in Texas, New Mexico, and Arizona.

These are all Level 4 operations today, with a safety driver in the cab to deal with contingencies, and also to drive the truck onto and off of the Interstate. But as Josh Fisher points out in “Trucking’s Self-Driving Future” (FleetOwner, April 2021), these test runs are just the beginning. Level 4 autonomy has the potential to yield large productivity gains in long-haul trucking. One near-term possibility (federal regulations permitting) is a Class 8 truck with two drivers, one of whom can sleep in the sleeper berth while the other drives. That truck could be in productive motion the majority of each 24-hour period, instead of only half of that period. That means much faster deliveries for truck freight competing with railroads.

Another way to accomplish this is truck platooning. Initial platooning, as planned by startup Locomation, envisions a two-truck platoon of Level 4 trucks, initially with a driver in both the lead truck and the following truck, but only one actually driving the platoon while the following driver’s truck is driven by the ADS, linked wirelessly to the lead truck. When the lead driver reaches his maximum-allowed driving hours, the following driver would move his truck into the lead, and the former lead driver could sleep. Eventually, there need not be a driver in the following truck, and the platoon could extend to three or four trucks (hopefully in dedicated truck-only lanes). Far from being a threat to truck drivers, as Diana Furchtgott-Roth pointed in a recent Forbes column, this kind of productivity-increasing automation could help solve the major ongoing shortage of long-haul truck drivers.

A lot of investor money is counting on this expanding Level 4 commercial truck scenario. I think their case is plausible, but note that it will take some key regulatory reforms to make it possible at significant scale.

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Transit’s Near-Term Future
By Baruch Feigenbaum

When the COVID-19 pandemic became widespread in March 2020, transit ridership dropped through the floor. Ridership had already been declining for four years, but the social-distancing and stay-at-home orders caused a major plunge. Many daily transit riders avoided trains and buses as if there were a plague (which there was) and either worked from home, drove to work, or (in the limited situations where this was feasible) cycled or walked to work. Rail ridership dropped by more than 90% and bus ridership by 50%.

Fast-forward 18 months and mass transit ridership is still far below pre-pandemic totals. Bus ridership has recovered to 80% of pre-pandemic levels while rail ridership has recovered to only 40%. The different recovery rates are due to a variety of factors, including that those transit-dependent customers who largely ride buses were less likely to abandon transit and, if they had abandoned it, more likely to come back since they lack affordable alternatives.

With much lower ridership, transit agencies have lobbied the federal government for bailouts. Thus far, taxpayers have provided an extra $70 billion in federal funding to keep transit operating. This is more than 300% of transit’s average annual federal appropriations, a truly staggering number. These bailouts cannot continue indefinitely. The bipartisan infrastructure and surface transportation reauthorization bill includes $39 billion for public transit systems through 2026. But with current ridership totals, even that sum will not be enough for transit agencies to maintain their current level of service.

As transit agencies have continued to beg for funding, many mainstream news organizations have moved from supportive to questioning to skeptical about transit’s future.

Katherine Shaver at The Washington Post noted how workers no longer accept that it is inevitable to lose time to commuting. In interviews with employees across the Washington, D.C., region, the newspaper highlighted transit customers who have switched from transit to driving or cycling. Many workers needed time to adjust their daily routines. Initially, some missed the mental buffer the commute provided; others missed the interaction with other riders. But most former transit users are getting more exercise, enjoying more free time, and enjoying the change. Nobody thinks the commute of the future will resemble the pre-pandemic commute.

Thomas Day of Governing asks whether billions of federal dollars will bring commuters back to transit. And unless state and local governments make other policy changes, the answer is likely no. Most transit agencies have tried to appeal to both transit-choice and transit-dependent riders, and few have succeeded. Transit-oriented development can lure choice riders but the development often pushes up housing prices and displaces dependent riders to the suburbs. Suburban transit service is more expensive to operate and operates less frequently. The new trend of eliminating fares may increase transit-dependent ridership but it does little to draw choice riders. Eliminating free parking and single-family zoning could make a big difference, but both are unpopular with the population as a whole.

David Harrison of The Wall Street Journal points out that despite receiving billions in federal funding, deficits loom. One problem is the restrictions that Congress places on the money. Agencies cannot use funding from the surface transportation reauthorization for day-to-day expenses such as paying salaries and buying fuel. Instead, much of that money is dedicated to building new rail lines, even when agencies do not have the funds to operate existing lines. Federal transit policy is designed for politicians who love ribbon-cuttings as opposed to actual riders.

Nicole Friedman of he Wall Street Journal notes how the length of the commute to work is dropping in importance. This trend is concentrated in regions with the highest average housing price such as New York City, San Francisco, Los Angeles, and Washington D.C. But these are also four of the seven regions with the highest number of transit commuters. In the two-year periods ending in 2013, 2015, 2017, and 2019 the fastest home-price growth was in metro areas within a 10-20 minute commute of a job center. But in 2021, home values in neighborhoods with a 70-minute commute rose 30% outpacing a 9.2% price gain for 20-minute commutes and a 2.5% decline for 10-minute commutes. Now that many folks do not have to commute to the office every day, they are choosing to live in areas with little or no transit service.

Patrick McGeehan of The New York Times examined how ridership on New York City’s commuter rail lines may never recover. New York’s three commuter railroads have been particularly hard hit. Ridership is still less than half of what it was pre-COVID. The drop in monthly passes, purchased by the most frequent riders, has been the largest, declining from $300 million in revenue to $72 million in the latest fiscal year. Passengers are more likely to ride once or twice a week, and outside of traditional peak periods. The railroads recently pushed back expected ridership gains from fall 2021 to winter 2022 due to the outbreak of the delta-variant of COVID-19. Yet, the authority’s engineering consultant does not think ridership will reach 80% of pre-COVID-19 levels until 2025 or later.

It is an obviously challenging time for mass transit. And the five articles mentioned above highlighted legal and policy changes that need to be made. Transit agencies need to become proactive.

First, mass transit agencies would be wise to focus on transit-dependent riders. Transit-choice riders are going to become even more challenging to attract in the near-term, and doing so too often reduces the number of transit-dependent riders that can be served.

Second, transit agencies may need to make fixed-route service cuts. The recovery in transit ridership is progressing more slowly than forecast and all of the current service based on pre-pandemic travel patterns is not sustainable.

Third, instead of asking Congress for more money, ask for the ability to use the surface transportation reauthorization funds for day-to-day expenses. It is an easier ask politically and it focuses money on current needs.

Within the next six months, I will detail more comprehensive, long-term changes transit agencies should make in my forthcoming 21st Century Transit study. But for now, mass transit agencies that adopt the three changes detailed above will be making the type of short/medium-term changes needed to survive.

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Do Electric Vehicles Cost Less to Maintain than Internal Combustion Engine Vehicles?

There is a widespread perception that although EVs cost more to purchase than comparable ICE vehicles, the EVs will cost less to repair and maintain. That’s plausible when you consider all the parts an EV doesn’t need: transmission, engine-related filters, engine cooling system, etc. Many models predict a significantly lower overall cost of ownership for EVs because of such factors. But these are still early days, and we are only beginning to get data on EV maintenance—and so far that evidence is mixed.

One recent study supports the conventional wisdom. It was done at Argonne National Laboratory, a part of the Department of Energy. The headline news was “Maintenance Costs of Battery Electric Vehicles Are 40% Lower than ICE Vehicles.” But Michael Sena, in the October 2021 issue of his excellent newsletter, The Dispatcher, explained how Argonne reached this conclusion. It used data from the Bureau of Labor Statistics 2020 Consumer Expenditure Survey on the average maintenance costs of several dozen maintenance items on ICE vehicles (transmission service, timing belt, brake fluid, etc.). The researchers then subtracted from that table all the maintenance items not needed on an EV. By definition, this produced lower costs, since no actual data on the maintenance needed by battery EVs was available.

That shortcoming has been remedied to some extent by a new study carried out by business analytics firm We Predict. Its cost comparison was based on actual repair bills for 801,000 vehicles—both ICE and EV—for model year 2021. In the first 90 days of ownership, this study found, EV owners had maintenance bills averaging $123, compared with $53 for a new ICE vehicle. EV parts averaged $65 versus $28 for ICE, and labor costs averaged $58 for EVs versus $25 for ICEs. We Predict expects that longer-term maintenance costs will follow a similar pattern, but that remains to be seen. EVs are still a new phenomenon to most repair shops, and EV parts may not be as readily available.

One other recent study looked into the cost of collision repairs. CCC Intelligent Solutions obtained one year of data from direct repair program appraisals for repairs to non-luxury small cars that were still in “driveable” condition. The research compared only cars for which there were both ICE and EV versions (such as Chevy Bolt vs. Sonic and Nissan Leaf vs. Sentra). The average cost of repairs was 3% higher for EVs. Repairs to EVs averaged 22 labor hours compared with 25.6 hours for ICE cars, but the EV labor was less productive because more of technicians’ time was spent performing scans and calibrations as well as researching repair methods. Once again, these may be short-term problems, since few repair shops are fully up-to-speed on dealing with EVs.

Overall, then, these are early days, with limited production and use of EVs, compared with what we are likely to see a decade from now. The hypothesis of lower maintenance and repair costs for EVs may well be borne out when these vehicles become mainstream.

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Maryland Express Toll Lane Critics Seize on Bottlenecks Their Opposition Created

The final Supplemental Draft Environmental Impact Statement (SDEIS) on the scaled-back plan for express toll lanes (on the American Legion Bridge, on a short stretch of Beltway I-495 north of the bridge and on the I-270 spur heading northwest to I-370) was released at the end of September, to the expected chorus of cheers and jeers.

Proponents cheered the systemwide delay reductions of 18% during the AM peak and 32% during the PM peak, as well as the greatly-reduced property takes due to excluding from this project the rest of the Maryland portion of the I-495 Beltway, especially between the I-270 spur on the west and I-95 on the east.

Long-time opponents criticized the reduced time savings in some directions at certain times of day, compared with the earlier EIS that was based on adding express toll lanes (ETL) past I-370 all the way to Frederick, and on I-495 all the way to I-95. Where cars must leave the ETLs where they end (prematurely) there will be congested bottlenecks, of course. That’s why the original plan called for ETLs on all the stretches of this system of highways that experience serious AM and PM congestion.

Opponents’ objections delayed the needed EIS for the extension of the ETLs from the I-370 interchange northward to Frederick. Those lanes are still part of the current plan, but the SDEIS could only analyze project elements that already were approved. So the phony bottleneck north of I-370 had to be evaluated as if it was not going to be fixed by extending the new lanes to Frederick, though those additional lanes may take a few more years to be built and enter service.

Likewise, the same opponents who fought bitterly to prevent adding ETLs on the Beltway between I-270 and I-95 now damn the project for showing continued congestion on that long stretch. Officially, it is still the Maryland Department of Transportation’s (MDOT) plan to add ETLs to that corridor in a subsequent project, but gaining approval for that will depend on who succeeds Gov. Larry Hogan when his second term expires, so is hardly guaranteed.

On the other hand, the SDEIS shows very significant time savings in the AM southbound (peak) travel because travelers going that way will encounter no bottlenecks. After they cross the new American Legion Bridge heading into Virginia, they will reach the extensive ETL network that now encompasses I-495 to I-95, I-95 south well beyond the metro area, I-395 from the Beltway into D.C., and within another year or so on I-66 out to the far western suburbs. No bottlenecks there!

Express toll lanes in several other parts of the country have had troubles in places where the lanes encountered bottlenecks. In the Seattle area, the ETLs on I-405 heading north dropped from two lanes each way to one, creating a PM peak bottleneck. Fortunately, the project to add a second ETL there has been approved and is getting under way. In Miami, a physical bottleneck exists in the northbound (PM peak) travel in the I-95 ETLs: the complex, congested, obsolete Golden Glades Interchange where the Turnpike, I-95, and several major arterials converge with numerous lane changes. Redesigning and rebuilding that interchange is not in Florida DOT’s long-range plan, due to its estimated cost likely exceeding $2 billion. And since an anti-toll law passed by the state legislature several years ago forbids FDOT to charge a market-clearing price during serious congestion, opponents can call the northbound ETLs there a failure.

There is a possible path forward for Maryland DOT. Assuming the current project (including the extension to Frederick) works out well, its next step should be to consider alternative approaches for adding ETLs to the Beltway between I-270 and I-95 without the massive property takes in its now-rejected plan. One possible model is the ETLs added a decade ago to the LBJ Freeway (I-635) in Dallas. TxDOT had promised that this corridor would face no future widening, so the ETLs had to fit within the existing right of way. The innovative approach that Cintra developed and implemented added the express lanes in a trench (below grade) and replaced the general-purpose lanes, built partly cantilevered over the ETLs. It might turn out that the additional cost of adding ETLs this way would not exceed what MDOT would have had to pay to condemn all the properties needed under its original plan for that part of the system.

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News Notes

Bipartisan Bill Includes Major Environmental Streamlining
A positive result of the Trump administration’s mostly unrealized infrastructure plan was the One Federal Decision (OFD) policy, issued as an executive order in 2017 with bipartisan support. As explained by Jeffrey Rosen and D. J. Gribbin in a Sept. 29 column in The Hill, the measure dramatically streamlined the permitting process for federally assisted infrastructure projects, including a requirement that all the relevant agencies agree on a lead agency and perform their reviews in parallel, not sequentially. Unfortunately, President Biden rescinded OFD during his first week in office. The good news is that the bipartisan Senate infrastructure bill awaiting a House vote devotes 15 pages to codifying OFD’s provisions, which again demonstrates the measure’s bipartisan support.

New Jersey Turnpike Now an Even Bigger Cash Cow
The $12.3 billion project for a new tunnel under the Hudson River, to be shared by Amtrak and New Jersey Transit, will get a significant part of its budget from de-facto taxes on New York metro area toll road customers. The agreed-upon share of the cost coming from New Jersey, $1.6 billion, will be paid for by New Jersey Turnpike customers, out of revenues from last year’s 30% increase in toll rates. The source of New York’s $2.3 billion share has not been specified, but the bistate Port Authority of New York & New Jersey—which treats its toll bridges and tunnels as cash cows—will very likely tap them again for its $2.2 billion share. Treating toll roads as cash cows feeds opposition to tolling and should be rejected as a gross violation of the users-pay/users-benefit principle.

Transurban Invests $8.1 billion in Sydney Toll Project
Australia’s leading toll road company, along with several investment partners, has committed to investing $8.1 billion to acquire the remaining 49% of the huge Westconnex toll project concession that it did not already own. Its partners include sovereign wealth funds and public pension funds. Transurban is now the developer/operator of most of the toll roads in the Sydney metro area. Westconnex is a set of new tolled tunnels connecting several key links in Sydney’s tolled expressway network.

Another Aging Highway Viaduct Will Be Demolished
More than a decade ago, Boston made headlines by replacing an aging elevated I-93 through downtown Boston with a set of tunnels. Late last month, a long-running debate over another aging viaduct, this one on the Massachusetts Turnpike, was ended with the announcement of a $1.7 billion plan to replace the viaduct with an at-ground solution in the Allston area. A key to the project plan is converting a no-longer-used railroad yard owned by Harvard University into a mixed use development, including a new transit station, and enough room to include eight lanes of Turnpike, four lanes of Soldiers Field Road, and four rail tracks on the surface. The project will be partially funded by Turnpike tolls.

Commercial-Service Autonomous Vehicles OK’d for San Francisco Bay Area
Both Cruise and Waymo have received permits from the California Department of Motor Vehicles to operate some types of autonomous vehicles (AVs) in portions of the Bay Area. Cruise may operate light-duty commercial AVs on surface streets at a maximum speed of 30 mph—without a safety driver on-board. Waymo’s permit authorizes it to operate commercial AVs with a safety driver on public roads within portions of San Francisco and San Mateo Counties, at speeds up to 65 mph (presumably on freeways).

I-69 Toll Bridge Gets Clearance for Construction
The final environmental impact statement and record of decision for the I-69 ORX (Ohio River Crossing between Indiana and Kentucky) project received FHWA approval last month. The project will build a four-lane, 7,600-ft. long toll bridge across the Ohio River plus 11.2 miles of supporting roadway. The estimated construction cost is $1.5 billion. The bridge is a key link in the completion of the long-planned I-69, which begins in Michigan and ends in Texas. It will link the nearly-completed I-69 in Indiana with the mostly I-69-designated sections of existing parkways in Kentucky.

GoCarma Wins IBTTA Award
The HOV occupancy detection system developed by GoCarma has received a Toll Excellence Award from the International Bridge, Tunnel, and Turnpike Association (IBTTA). The system relies on detecting smartphones of vehicle occupants to qualify the vehicle for toll discounts in express toll lanes. It is in use on the TEXpress Lanes in the Dallas/Ft. Worth metro area, used by some 45,000 daily commuters.

PennDOT Selects Finalists for Toll-Financed Bridge Replacements
The P3 office of Pennsylvania DOT last month announced the selection of three finalists for its approximately $2 billion project to replace nine aging bridges on its Interstate highways. The teams are led by Macquarie, Kiewit, and Cintra/Itinera—all with considerable P3 and toll road experience. The RFP is expected to be released before the end of this year, and the winning bidder(s) will initially enter into a pre-development agreement (PDA) to scope out the design, constraints, and financing approach for each bridge project.

Miami Toll Road Extension Gets Green Light
A $1 billion southward extension of Miami-Dade Expressway Authority’s Dolphin Expressway (SR 836) received clearance last month from the state’s governor and cabinet members. It will be a 13-mile extension southward to the West Kendall area and will be called the Kendall Parkway. It has been opposed by environmental groups and NIMBYs on the usual grounds, in this case, because it is to be built just over the edge of the Miami-Dade County urban growth boundary (hence, on the edge of the Everglades), to avoid property takes in this mostly residential area.

U.S. VMT Nearly Back to Pre-Pandemic Level
Despite the continued increase in working from home, overall vehicle miles of travel (VMT) in July 2021 was 290.1 billion, nearly matching the 292.9 billion miles driven in July 2019. Although AM peaks are still lower than in recent years, overall travel is more evenly distributed during daylight hours, resulting in the return to nearly pre-pandemic levels. Transit ridership is still significantly lower than pre-pandemic ridership.

Which Form of Variable Pricing Works Better?
Ever since the first near-real-time adjustment of pricing on express toll lanes was introduced (and became the predominant form of pricing in such lanes), most analysts had assumed it would do a better job at managing traffic flow than time-of-day pricing (which may be adjusted only at quarterly or semi-annual intervals). But a new study suggests otherwise. Mark Burris and his Texas A&M Transportation Institute colleagues used data from a number of express toll lane projects to compare what they termed dynamic pricing and variable pricing. They found little difference between the two, in terms of keeping traffic flowing in managed lanes. The study was sponsored by the National Institute for Congestion Reduction.

Excellent Study of the Ports/Shipping Crunch
For most of this year, I’ve been reading regular reports on America’s clogged seaports, shortages of container chassis, disappointing performance of rail intermodal service, etc. But if you want to read one concise, substantive assessment of this problem, I recommend Scott Lincicome’s “America’s Ports Problem Is Decades in the Making,” on his Capitolism blog. U.S. ports are far less productive than many Asian and European ports, and the Jones Act leads to cargo that might go by river or the inland waterway system traveling instead by overloaded trucks and trains. Read and weep.

Locations Narrowed for $1 Billion I-10 Bridge Across Mississippi River
Having once been stuck in rush-hour gridlock on I-10 in Baton Rouge, I can well understand the need for a new bridge there. The Louisiana Department of Transportation & Development has been working with a consultant to identify potential routes and connections for the new crossing. Last month, the team announced that out of 32 initially proposed sites, they have narrowed this down to only 17. The next step, to be completed by autumn 2022, is to whittle those 17 down to three or four finalists for more detailed analysis and preliminary designs. There is no question that “There is going to be a toll on this bridge,” Eric Kalivoda of the Capital Area Road and Bridge District told the meeting that reviewed the 17 candidate sites. Toll modeling will be a “really big piece” of the next round of studies, consultant Kara Moree said.

A New Approach to Automating Vehicles?
In its Science & Technology section of the September 4 issue, The Economist reported on an alternative to the use of machine learning to train a vehicle’s automation system. The source is a paper in Artificial Intelligence by Mehul Bhatt of Orebro University (Sweden) who is also the founder of CoDesign Lab. His new software takes existing AI programs and couples them to what he calls a “symbolic reasoning engine.” It applies physics concepts to what occurs during driving, including the kinds of spatial relations that seem to baffle Teslas that run into stationary objects or try to drive underneath the trailers of 18-wheel trucks. Moreover, unlike with machine learning, this software can explain why it took the action it did. You can read the magazine’s summary, titled “AI for Vehicles: Is it smarter than a seven-month-old?”

Taxis Regaining Market Share in New York City
Business Insider (August 27) reported a 152% increase between April and July in taxicab transactions hailed via mobile app Curb. Reporter Allana Akhtar notes that the average price of a trip on Uber and Lyft increased 23% between January and June, possibly accounting for the increase in taxi use. By contrast, the average taxi ride decreased in price in both 2020 and again in 2021, reaching only $13.63 in June. It looks as if competition still works.

Climate Apocalypse or Just a Large Problem?
Since the latest report from the Intergovernmental Panel on Climate Change was released several months ago, there have been competing points of view in blog posts and op-eds. Some portray the latest report as evidence that we are going to hell in a handbasket unless we take dramatic action very soon to completely decarbonize the economies of all countries. Others point to the same report to say that while we do have a big problem to address, it is far from being apocalyptic. The lesson I’ve drawn from reading several well-researched books and research papers is that it depends on which IPCC scenario you take most seriously. The apocalyptics rely on what is informally known as the “business as usual” scenario, in which there are no changes in the composition of energy use (technically RCP8.5), which is very far from what is actually happening. A far more realistic mid-range scenario shows that reaching a limited global temperature rise appears do-able, though with a lot more changes than have thus far been agreed to, especially by China and India. A good introduction to this subject is a paper in Issues in Science & Technology by Roger Pielke, Jr. and Justin Ritchie, “How Climate Scenarios Lost Touch with Reality.”

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Quotable Quotes

“[C]ost-benefit analysis must be done by an independent entity. . . . All cost-benefit analysis is subject to gaming, since assumptions about inputs are critical to the outcomes. When those who provide the estimates of benefits and costs are able to inflate the former and understate the latter, the results of the analysis may not be an appropriate ranking of potential projects. Rather than selecting the most attractive projects, the use of cost-benefit analysis may only identify the projects with proponents with the greatest proclivity to overstate benefits relative to costs.”
—Edward Glaeser and James Poterba, “Economic Perspectives on Infrastructure Investment,” Aspen Economic Strategy Group, July 14, 2021

“By 2018, the CEOs of the major companies that had invested most heavily in ADS [automated driving systems] (Waymo, General Motors, Ford, Aurora) were starting to make public statements tempering their earlier optimism by pointing out that the rollout of automated driving would be incremental, beginning with operations under constrained conditions in tightly restricted locations. At the pace they are now going, it will require decades to expand to anything approaching nationwide deployment. The organizational learning curve and costs have been much longer and higher than expected. After investing at least a decade and billions of dollars in ADS development, the companies have learned that the technical requirements to support widespread use of the technology are far more complicated than they had originally envisioned.”
—Steven Shladover (UC Berkeley), “’Self-Driving’ Cars Begin to Emerge from a Cloud of Hype,” Scientific American, Sept. 25, 2021

“All one needs is to look at the latest California Lawrence Livermore Energy Flow Map to seriously doubt that banning ICEs [internal combustion engine] vehicles in favor of EVs is going to deliver environmental benefits that are in line with the likely societal angst associated with the cure. It remains questionable that any environmental benefits accrue from switching from an ICE to an EV. The LL Energy Map shows that 40% of California’s electricity is now generated from natural gas. I’m assuming that California operates its electrical system so as to minimize environmental impact, so that it is burning natural gas only because the other, less-polluting, sources are maxed out. Thus, each new user of electricity in California, such as each conversion of an ICE to EV, will be powered by natural gas. Moreover, two-thirds of the generated electricity is lost (“rejected energy’) even before it gets to the car’s electric charger. So, one has to do some careful computations in the various scenarios to determine if powering personal cars with natural gas today in California is even infinitesimally better than with gasoline. (The answer is more obvious in Texas, where almost 30% of electricity today is generated by coal. Not even close!) For 2035, one needs to have a clear vision of how electric generation will evolve, how transmission losses can be reduced, and how improvements in the ICE may emerge before on institutionalizes executive orders aimed at the How.”
—Alain Kornhauser (Princeton University), “California Is Coming for Your Car,” Smart Driving Cars, August 2021

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The post Surface Transportation News: Rhetorical war on freeway expansion, transit’s near-term future, and more appeared first on Reason Foundation.

• Problems with all-electric transportation
• Freight rail innovation in jeopardy
• Virginia embracing per-mile charging
• What is a “business case ROI” for passenger rail?
• “Green Jim Crow” in California
• MBUFs and rural drivers
• News Notes
• Quotable Quotes

Problems on the Road to All-Electric Transportation

Over the past few years, I’ve become convinced of the superiority of electric vehicles. Part of this was an exhilarating ride in a friend’s Tesla and more enthusiasm has come via keeping up with technology advances. As electric vehicles (EVs) mature, with next-generation battery systems having much greater range and/or much shorter recharging times, I’ll be happy to trade in my current vehicle for the cleaner, quicker, and less maintenance-intensive EV that is coming.

That said, there are some major problems preventing the emergence of an all-electric personal vehicle fleet. (I’ll discuss all-electric trucks on another occasion). As a starting point, I recommend renowned energy analyst Daniel Yergin’s recent piece in Politico Magazine, “The Major Problems Blocking America’s Electric Car Future.” His article discusses supply chain transformation, modernization and expansion of the electricity grid, and public acceptance of very different vehicles. Another good introduction is former U.S. Department of Transportation (DOT) research and technology advisor Steven Polzin’s Q&A session at Arizona State University.

Here is my brief overview of the problems the industry and government must address to get beyond idealistic projections of no more fossil-fuel vehicles sold beyond 2030 and a completely carbon-free electricity sector by 2035.

Enough electric generating capacity

Most attempts to quantify a complete phase-out of fossil fuel electricity generation by 2035 take the objective to be replacing the current 4.13 terawatt-hours generated in 2019. Reason science editor Ron Bailey earlier this year wrote a good summary of the Energy Information Administration’s estimates of what this would take. For example, it would take 290 new nuclear power plants to replace the 62% of current electricity generated by coal and natural gas, at an estimated cost of $3.6 trillion—and in just 15 years. Alternatively, aiming to get 90% there via wind and solar (with some natural gas backup) was estimated by a University of California—Berkeley Center for Environmental Public Policy study to cost $1.7 trillion.

But that is just to replace current electricity uses. If even 60% of all US cars were electric vehicles by 2050, the nation’s electricity capacity would need to double by that date, according to the January 2021 electrification futures study by the National Renewable Energy Laboratory. Reuters’ Nichola Groom and Tina Bellon provided a good summary of this challenge in “EV Rollout Will Require Huge Investments in Strained U.S. Power Grids.” I will venture to say that neither replacement of all existing electricity capacity by 2035 nor doubling its current capacity by 2050 will happen.

Battery problems

News articles regularly appear about the limitations of current electric vehicle batteries. They don’t provide enough range for trips beyond urban travel. They take far longer to charge than refilling a conventional car’s gas tank (which is why nearly all of today’s gas stations lack the room to serve more than a handful of EV charging customers per hour). The current lithium batteries cost way too much (which is why EVs cost far more than a conventional car of the same size), they can catch fire and explode, and they require a number of rare and expensive metals, whose sources are mostly in either China or underdeveloped countries. The good news is there’s a fortune being invested in new kinds of vehicle batteries, but no one can predict how soon and how much better the next generation of EV batteries will be.

Far more (and much faster) EV charging

The “more” problem is one focus of the Biden administration’s environmental agenda, focusing mostly on subsidies for electric vehicle charging stations. If successful, this risks putting lots of new capacity in place before there is enough demand for it, but leave that aside. The administration and the Senate have shown no interest in changing federal law to allow EV charging facilities on rural Interstate highway rest areas, unlike the House, whose Fixing America’s Surface Transportation (FAST) Act reauthorization bill includes such a provision. An informal business/environmental coalition is trying to build support for including this provision in one of the pending infrastructure bills, but the White House and DOT have remained silent on this.

Faster EV charging is being developed by researchers and battery companies (established and startups), but even cutting it from 45 minutes to 15 still means much longer waits for customers and far more acreage needed due to durations several times longer than at gas pumps. This will be a much bigger problem for long-distance car and truck trips than for urban travel, where much EV charging can take place overnight at home, or at workplaces.

Environmental opposition

Experts know that the kind of electrical transformation desired by the Biden administration and (in theory) by nearly all environmental groups will require a huge investment in new long-distance electricity transmission lines, huge areas to locate a vast expansion of solar panels and windmills, and a very large expansion of mining rare-earth minerals, such as lithium and others. Yet as these efforts are starting to get underway, we see various environmental groups, often allied with local NIMBYs, seeking to block new transmission lines, large-scale solar arrays even in deserts, a major expansion of wind power installations, and domestic attempts to start mining lithium and other rare earths. Since this is a surface transportation newsletter, let me just say that there are numerous examples and they are taking place with increasing frequency. The major environmental groups need to start speaking out against this kind of opposition if we are to take their commitment to widespread electrification seriously. And the Biden administration needs to reform the National Environmental Policy Act (NEPA) to reduce endless opportunities for litigation that seeks to block just about every kind of new infrastructure project.

For all these reasons, I have to be skeptical about grandiose electrification goals for 2030, 2035, or even 2050. And if achieving those goals will actually take a lot longer, we need to think through what is actually possible, let alone cost-effective. A completely EV America will require a much larger electricity sector.

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Freight Rail Innovation Faces Policy Headwinds
By Marc Scribner

In the relatively recent past, the U.S. railroad industry was facing collapse due to generations of counterproductive economic regulation. Fortunately, a bipartisan consensus recognizing the harm of over-regulation formed in the 1970s. Shortly thereafter, the federal government began deregulating the industry, which culminated in the Staggers Rail Act of 1980. This liberalization restored the vibrancy of America’s freight rail network, but rail’s future success likely depends on technological innovation to keep up with its truck competitors. Both existing policy and new counterproductive proposals threaten this innovation agenda, as discussed in a new policy brief published by Reason Foundation. The full brief (.pdf) is available here.

Since partial deregulation in 1980, average inflation-adjusted freight rates have fallen by 44%, train accident rates are down 75%, employee injuries and occupational illnesses have fallen by 83%, all while freight railroads have invested more than $740 billion of their own funds to revitalize their networks to support a 75% increase in freight volume. The fastest growing traffic segment has been intermodal—the shipping containers and trailers that can be moved between rail, truck, and waterborne carriers—and intermodal rail traffic increased by nearly 350% between 1980 and 2019. Intermodal rail traffic in 2019 accounted for more than 15% of industry gross revenue, making up the largest single traffic segment. Much of the future growth of intermodal traffic on rail is likely to depend on how adequately rail can compete with and complement trucking.

The 21st-century competitive landscape of freight transportation is likely to be largely determined by future advances in transportation technology, especially automation. Two rail automation applications are worth considering.

First, infrastructure inspection automation uses unmanned track geometry cars that can augment and replace manual visual inspections. BNSF Railway found during its automated track inspection pilot program that automated geometry cars not only identified many defects that went undetected by visual inspections but also allowed for the redeployment of track inspectors to segments with greater known needs. As a result, its track inspectors on the pilot territory were “recording nearly three times the number of geometry defects per 100 miles than were identified by track inspectors systemwide,” according to a company filing with federal regulators.

BNSF also found safety benefits arising from reduced track occupancy—the number of inspectors and the amount of time required to perform their duties—which reduces track inspectors’ exposure to hazards in the field. Its pilot program saw 20% reductions in both the number of requests to occupy track and the number of hours the track was occupied.

The second, and more ambitious, innovation is train automation. After a Los Angeles passenger train driven by a distracted engineer crashed head-on into a freight train in 2008 and killed 25 people, Congress passed a law that required railroads to spend billions of dollars to develop and install positive train control (PTC) systems. PTC refers to a range of communication and automation technologies designed to prevent train-to-train collisions, over-speed derailments, incursions into work zones, and improper switching.

This unfunded mandate spurred further interest in automation. Train automation is likely to be incremental as functions are gradually automated and personnel are relieved from certain tasks as safety is assured. An automation phase-in could allow for reducing train crew sizes from two to one over time, already common in Europe and which consultancy Oliver Wyman estimated could save U.S. railroads up to $2.5 billion per year by 2030. Certain lower-risk operations, such as those in railyards, are likely to see train automation technology deployed sooner. But international experience suggests that fully automating at least some long-distance freight trains in the U.S. may be on the horizon.

In 2019, mining giant Rio Tinto Group successfully launched its AutoHaul fully automated train operations in Western Australia. AutoHaul involves simultaneous operation of up to 50 unmanned trains, each 1.5 miles long and carrying 240 cars of iron ore from mines to ports on an average 500-mile, 40-hour journey. Loading and unloading is completely automated, although crews still get on board and manually operate the trains as they approach ports. Rio Tinto’s nearly $1 billion effort took over a decade of planning, development, and testing, but reductions in travel time, fuel consumption, and track and locomotive wear-and-tear have already been realized.

But policy barriers to this future loom large. Deploying track inspection automation requires time-consuming and narrow waivers under current rules. Labor unions are promoting inflexible crew-size mandates that undermine the business case for train automation. And some shippers are lobbying for economic re-regulation that would disincentivize investment in new technologies. All these changes would reduce the appeal of freight rail relative to its competitors, leading to a shift in traffic from rail to truck. This would have private as well as social costs, including environmental consequences. Those concerned about transportation sector emissions should take note: when compared to freight rail on a ton-miles basis, the Environmental Protection Agency estimates that trucks emit approximately 10 times as much carbon dioxide (CO₂), two-and-a-half times as much nitrogen oxides (NO_X), and more than three times as much fine particulate matter (PM_2.5).

Automation in freight rail could produce large benefits in the 21st century, both private and social. Going forward, there will be much more policymaking to better match the technological, economic, and social challenges that may arise from automation technology deployment. But at this stage of early development, policymakers today should safeguard modernization by identifying and removing barriers, rather than imposing new burdens that will undermine railroads’ incentive to innovate.

For more on these issues, see the new Reason Foundation policy brief, “Pathways and Policy for 21^st Century Freight Rail.”

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Virginia Joining the Switch to Mileage-Based User Fees
By Baruch Feigenbaum

Back in 2009 when the National Surface Transportation Infrastructure Financing Commission, of which Reason’s Adrian Moore was a member, recommended replacing fuel taxes with mileage-based user fees (MBUFs), the report was met with some skepticism. Some denied that the fuel tax was losing its purchasing power. Others thought mileage-based user fees were far too complicated to ever be implementable. Several experts thought the transition from fuel taxes would take too long.

Fast forward 12 years and mileage-based user fees are being tested and starting to replace gas taxes in a number of states. Some 14 states (California, Colorado, Delaware, Hawaii, Minnesota, Missouri, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, Utah, Virginia, and Washington) and two multi-state coalitions (the Eastern Transportation Coalition and RUC West) have run pilot mileage-based user fees programs.

Even better, two states (Oregon and Utah) now have permanent (albeit limited) MBUF programs, with a third state, Virginia, ready to begin its own program in July of 2022. So it’s time to take a closer look at Virginia’s program.

As spelled out in legislation, the Virginia Department of Motor Vehicles has created a task force to hash out the exact details. While the program rules won’t be finalized until Dec. 15, I’ve gleaned some details from the interim report released earlier this year. The overall approach is solid but I have some suggestions based on the successes and failures of pilots and permanent programs in other states.

The Virginia program will be open to owners of electric vehicles, hybrid vehicles, and vehicles with an average city/highway combined fuel efficiency of 25 miles per gallon or higher. Drivers would have to opt into the program; nobody is required to participate. Drivers with combustion engines who choose not to enroll in the program would continue to pay the gasoline tax. Electric vehicle owners who choose not to enroll would continue to pay the state’s overly complicated highway use fee (equal to 85% of the amount of fuel tax that would be used by a vehicle with a fuel economy of 23.7 miles per gallon driven an average number of miles per year for a light-duty vehicle).

But why limit the MBUF program to a subset of drivers? From an administrative perspective, the state can handle charging all types of vehicles. All drivers of light-duty vehicles should be eligible. I realize that the state is most concerned with revenue lost from vehicles that consume little or no gasoline but electric vehicles already pay the highway use fee. And Virginia won’t get a true sense of mileage-based user fees unless the program is open to a variety of vehicles, from Toyota Priuses and Ford F-150’s. Oregon’s 2013 pilot, which was open to all vehicles, should be the model.

We don’t know how the state will recruit and select drivers, but given the focus on vehicles that pay little in fuel taxes, participation figures to be highest in Northern Virginia, moderate in Richmond and Hampton Roads, and nearly non-existent almost everywhere else. Virginia’s program managers need to seek out drivers from all geographic regions. The Oregon program has bipartisan support today, in part because the state made sure to include multiple interest groups. The Washington State Transportation Commission offered the best participation model. The commission created a steering committee with members from all geographic areas and intentionally selected committee members from groups initially opposed to MBUFs including the American Civil Liberties Union and farmers.

This approach allowed pilot leaders to address some common but false concerns such as that rural drivers would pay more in mileage-based user fees than they would with the gas tax. In reality, rural drivers generally pay less in MBUFs than in gas taxes because they mostly drive less fuel-efficient vehicles than urban residents, but most folks were never going to believe that until they experienced it for themselves.

Wisely, Virginia seems legitimately concerned about privacy. It plans to use private account managers—not the government—to collect data. I hope those account managers communicate that the data is encrypted and anonymized as well as the one-way flow of information. However, the state’s two GPS choices fail to provide a simple technology option such as an odometer reading. While it might not offer all the bells and whistles of a GPS system, an odometer reading is still more mileage-based than the gas tax. Most programs have offered high-tech and low-tech options as a way to build support for the transition to MBUFs.

Finally, the state needs a strategy for interstate travel, particularly for those who live in Virginia and work in Washington, DC, or Maryland. There are two promising options. One is for Virginia to strengthen its partnership with the Eastern States Transportation Coalition and have Maryland and DC residents who want to participate join the program. (Legislation in Maryland and DC would probably be required). The other option is to partner with EZPass, which would work with private account providers to collect necessary information, and Virginia would learn how to administer mileage-based user fees in a multi-state metro area.

The MBUF critics are gradually being proven wrong. The fuel tax has lost more than 50% of its purchasing power. MBUFs have been successfully implemented in two states. The transition from fuel taxes has not been fast, but it has been gaining steam. And the privacy challenges are solvable.

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What Is a “Business Case ROI” for Passenger Rail?

The American Public Transportation Association (APTA) and the American Association of State Highway and Transportation Officials (AASHTO) jointly released a report called “Assessing the Business Case ROI for Intercity Passenger Rail Corridor Investment” in June. This article discusses Volume 1, referred to as a guide for decision-makers.

The basic idea appears to be that since normal benefit/cost analysis fails to justify investment in either Amtrak improvements or high-speed rail (HSR) projects those wanting such projects to gain acceptance need to come up with an additional way of demonstrating and quantifying benefits, such as public policy goals and benefits that accrue to various governments and businesses affected by passenger rail service. I see a number of problems with this approach, so I apologize in advance to several of the people named as advisors on the project whom I know and respect.

A major problem is that the business case return on investment, as described in this report, seems to ignore costs to various stakeholders. It counts as benefits people shifted from driving, flying, and traveling via intercity bus services while ignoring the costs of lost income to toll roads, state DOTs, airlines, and bus companies. Maybe the authors don’t think of these modes as stakeholders, but any quantification of mode-shift benefits must be net of negative impacts on the alternative modes.

The discussion of value capture, such as increased property values around newly built rail stations, is rather superficial. First, it depends on the willingness of local governments to actually tax such increased-value properties. Second, it ignores the negative benefits to all those along the new rail line who will be impacted by noise, vibration, and grade-crossing safety hazards (unless the corridor is elevated to avoid grade crossings). Here in Florida, for example, there has been fierce ongoing opposition to the Brightline passenger rail service (now under construction between West Palm Beach and Orlando) from communities in counties where there would be no stations. These residents got only costs, not benefits. The vast majority of a new passenger rail right-of-way (ROW) will be without stations, and hence with adjoining properties being negatively affected.

Another item put forth as a benefit to be quantified is increased resilience. The idea is that in the event of a disaster, a passenger rail line provides an alternative to driving, bus travel, or air travel. It’s hard to take this very seriously, considering that the loss of a single bridge on a rail line puts it out of service. By contrast, the highway network is an interconnected grid of streets, roads, and highways, offering considerable redundancy if one or several links become inoperative.

I cannot resist noting that “induced travel” due to the new rail line is considered a benefit (Exhibit 4). This assumes that induced highway travel is bad while induced rail travel is good. That assumes that, for example, the carbon footprint of passenger rail trips 30 years from now will be less than that of families driving in their electric cars. Carbon footprint modal comparisons must be based on projected emissions over the expected life of the highway and rail modes being compared, not assumed away by assuming that the future will be the same as the past.

Left out of the discussion is the plight of federal, state, and possibly local taxpayers who, in one form or another, will end up paying most of the costs of any new intercity passenger rail services. Are they not stakeholders also?

I am especially troubled by the report’s emphasis on localized benefits, such as increased jobs and businesses moving to where there are stations for passenger rail. Especially if federal taxpayers are expected to bear the majority of the costs, such projects must be looked at from the standpoint of the impact on the national economy. Most, or all of these localized benefits would not be net gains; rather, they would be shifts of businesses from one county to another or from one state to another. Shifts of this kind are unlikely to increase U.S. gross domestic product. They are, at best, zero-sum changes in the national economy.

In the wake of the collapse of the Soviet Union, economists gained access to detailed records of the USSR’s state-owned enterprises. When they analyzed the costs of all the inputs to these enterprises and compared them to the value of their outputs, they concluded that most of them were “value-subtracting enterprises.” Passenger rail projects that will consume large amounts of taxpayer money without benefiting more than a handful of them could well amount to value-subtracting enterprises, from a national economy perspective.

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“Green Jim Crow” Article Critiques California Transportation, Land-Use, and Energy Policies

Some years ago this newsletter critiqued then-new California policies that aimed to reduce greenhouse gas emissions by reducing vehicle miles of travel (VMT). A later Reason Foundation policy study compared VMT-reduction with technology policies (increased vehicle efficiency, electric cars, and congestion pricing) as far more cost-effective ways to reduce greenhouse gas emissions.

But since then, California has gone from bad to worse in its environmental, transportation, and housing policies. How bad is described in detail in Jennifer Hernandez’s powerful article “Green Jim Crow: How California’s Climate Policies Undermine Civil Rights and Racial Equity.” A long-time environmental lawyer in San Francisco, Hernandez lays bare the impact of VMT reduction policies in the state’s major metro areas—Los Angeles, San Diego, and the San Francisco Bay Area—on low-income and minority residents.

She includes maps drawn up by the metropolitan planning organizations in each of these regions aimed at using housing policy to restrict VMT. In essence, the plan is to refuse to permit new housing in (mostly white) single-family neighborhoods and put massive high-density housing into low-income areas served by transit. She shows how these VMT red-lining plans mirror the blatantly discriminatory red-lining policies implemented prior to World War II in much of the United States. The idea is to put lots more people into what are now areas of below-average VMT on the presumption that those people will continue to be transit-dependent.

Yet as her article also explains, solid research has shown that the most effective way to enable lower-income people to get better jobs is car ownership, since many times more jobs are accessible in 30 minutes or 60 minutes by car than by transit. Moreover, with the ridiculously high housing costs in California, the high-density units that get put into low-income neighborhoods cost far more than lower-income minorities can afford, which leads to gentrification of those neighborhoods.

This article is a powerful indictment of misconceived energy, transportation, and land-use policies that are making California more segregated and far less of a land of opportunity than it was when I moved there as a young engineer in 1970.

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Concerns About MBUFs and Rural Drivers

One of the most commonly heard objections to replacing fuel taxes with mileage-based user fees (MBUFs) is that this would be unfair to rural residents who supposedly drive more than urban residents and are hence assumed to be made worse off. I’ve read a number of Transportation Research Board papers that analyze data on which kinds of motorists drive what kinds of vehicles how many miles per year, and they generally refute this contention. But there is now a far more accessible overview of this subject, released by RUC West, a consortium of state DOTs in western states that have been taking part in MBUF pilot projects. (Note: Out west, they refer to a per-mile charge as a road user charge, or RUC, rather than as an MBUF.)

RUC West analyzed the costs of a road user charge for urban and rural drivers in eight western states. They obtained data on vehicle miles of travel (VMT) by geographic area, vehicle registration data, and gas-tax revenue data, in order to develop a per-mile rate that would produce the same revenue as each state’s gas tax. One of the findings was that although the average trip length for rural drivers was longer than the average for urban drivers, annual VMT was higher for urban drivers. Consultant EDR analyzed vehicle data and found that, on average, rural drivers tend to drive older and less fuel-efficient vehicles than urban drivers.

Assuming the rate per mile is the same for all roads (as is the assumption in most of the pilot projects), the average rural driver would pay less under the RUC system than under the current gas tax system. A table in the four-page document summarizes the impact on urban and rural drivers in each of the eight western states taking part in the study. Depending on the state, rural drivers would save between 1.9% and 6.1% if their state shifted to per-mile charges, while urban drivers (who are far more numerous) would pay slightly more (from 0.3% to 1.4%).

The above results are averages, so, of course, some rural drivers would pay more or less than average, and so would urban drivers. This depends on what vehicle each owns. The four-page summary compares 2008 models of three popular vehicles: a Honda Accord, a Ford F150 pickup with 4-wheel drive, and a Toyota Prius. For these specific examples, the Accord and Prius would pay somewhat more per month with the road user charge than with the current gas tax, while the Ford would pay slightly less.

These are important findings, which should help to alleviate often-heard concerns about rural drivers being hurt economically by a shift to per-mile charging. They would likely do even better if the per-mile charge were higher for highways that cost the most to build and maintain (freeways and Interstates) and lower for all other streets and roads. That would fix a long-standing problem with the gas tax system under which vehicles pay the same amount per mile whether they use premium highways, neighborhood streets, or two-lane rural roads. Charging at least two different rates would not be very difficult to implement.

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News Notes

DOTs Fixing Gaps in Express Toll Lanes
Both the Minnesota (MnDOT) and Washington State (WSDOT) Department of Transportations are addressing bottlenecks on their emerging express toll lanes networks. In the former, MnDOT in August closed a three-mile gap in the northbound toll lane on I-35E (where the toll lane was replaced by a short general-purpose lane), which had led to extensive weaving of traffic into and out of the general-purpose lane by cars leaving or entering the toll lanes (now called E-ZPass lanes in Minnesota). Thanks to the recent conversion of those three miles, they now operate as E-ZPass lanes, like the rest of the northbound corridor and all of the corresponding southbound E-ZPass lane. In the Seattle metro area, WSDOT received federal environmental clearance on a project to fix the bottleneck on the I-405 express toll lanes, where the configuration changes from two to one tolled lane northbound and vice-versa southbound. The project will add one lane each way for five route miles, i.e., 10 lane miles at an estimated cost of $600 million. The environmental study stressed the air quality benefits of reduced congestion plus the extended uncongested route for Sound Transit’s express bus service in the corridor.

Miami Beach Monorail Moving Forward
Miami-Dade County is nearing the completion of pre-development work by MBM Partners on a project to add a 3.5-mile monorail adjacent to MacArthur Causeway linking downtown Miami and Miami Beach. The project is expected to be procured as a design/build/finance/operate/maintain concession, presumably financed based on availability payments. The plan calls for the monorail to offer 12 trips per hour with a 300-person capacity. There will be connections to other transit on either end of the monorail. No cost estimate is currently available, but the planned completion date is 2026. Renderings show the monorail running alongside the causeway, which means no traffic lanes will be taken away from this important artery.

Pennsylvania Toll-Financed Bridge Replacements Moving Forward
Despite a hostile bill in the state senate, PennDOT’s toll-financed Major Bridge P3 Program is moving forward. In August four potential bidders responded to the agency’s Request for Qualifications. The agency plans to release the request for proposals for the program in December, contemplating a “progressive public-private partnership (P3)” under which each initial contract would be a pre-development agreement (PDA) for one or more of the planned nine Interstate highway bridge replacements/rehabilitations. The latest version of the Drive Smart Act in the legislature would allow tolling only for the replacement of the I-95 Gerard Point Bridge while prohibiting it for the other eight bridges in PennDOT’s program.

Maryland Board Approves PDA for Express Toll Lanes Project
The state Board of Public Works last month approved, 2 to 1, the Maryland Department of Transportation’s (MDOT) plans to finalize a pre-development agreement with Macquarie and Transurban for phase 1 of the Beltway/I-270 express toll lanes project. The project will replace the aging and undersized American Legion Bridge on the Beltway (I-495) and extend the express lanes northward to I-270 and then up that Interstate to I-70 in Frederick. Under the PDA, the selected companies will design the project and work on pre-construction activities such as needed utility relocations. Threatening the project moving forward as MDOT plans is a bid protest by Cintra, one of the losing competitors for the project.

“Unimaginable” Rail Project Costs in Honolulu
A retired official of the Federal Transit Administration last month called the relentless cost escalation of the Honolulu rail transit project “unimaginable” and “far beyond” anything he has seen nationwide during his 30 years at the agency. Ron Fisher was director of the Federal Transit Administration’s Office of Project Planning, where he and his team reviewed every rail transit project seeking FTA funding. When FTA entered into its Full Funding Grant Agreement with Honolulu, the cost was put at $5.12 billion, but the current estimate is $12.449 billion. Fisher told the Honolulu Star-Advertiser that the cost escalation was “way beyond and unmatched by anything that I have observed. Of the projects we’ve done in the last few decades, there’s nothing that even approaches that cost overrun.”

EV Truck Firm Rivian Plans Share Offering
Rivian Automotive announced last month that it is planning a conventional stock market debut, after having privately raised $10.5 billion from investors since 2019. The company plans to make electric-powered pickup trucks and delivery vans, which are compatible with the relatively short daily mileage an electric light truck can deliver without recharging. It has a purchase agreement with Amazon for 100,000 delivery vans by the end of this decade. Amazon and Ford Motor Company are among Rivian’s largest investors thus far.

Houston’s Controversial I-45 Project Included in State Transportation Plan
The Texas Transportation Commission voted unanimously on September 2 to include the huge project to redesign and expand a stretch of I-45 near downtown Houston. The plan is opposed by many Houston officials and neighborhood groups due in part to very large planned property takes. The Federal Highway Administration earlier this year asked the Texas Department of Transportation to halt work on the project pending a new federal review of impacts on disadvantaged communities. The Transportation Commission said it would await federal inputs and reserved the option of removing the project from the plan at its December 9 meeting.

Private Toll Bridge Proposed in Northwest Louisiana
An executive formerly with the privately-developed Foley Beach Expressway in Alabama has proposed building a toll bridge across the Red River. It would connect two fast-growing parishes in the part of the state north of Shreveport. It would be the fourth bridge across that river in that region. The company, named Tim James, Inc., would finance, build, and operate the new bridge, charging tolls to recoup its costs.

Georgia Board Rejects Express Toll Lanes Winning Bidder
The State Transportation Planning Board last month rejected the sole “responsive” proposal for the SR 400 Express Lanes project, as recommended by the P3 Steering Committee. The team was headed by Meridiam and Walsh Group, both very credible companies. But analysis by the Georgia Department of Transportation’s (GDOT) chief engineer found that the price proposal “far exceeds the programmed funding for the project.” The project itself will proceed, but GDOT may have to make some changes to its requirements in order to get proposals that can be done within the available budget.

Should Santa Clara County’s Valley Transit Authority End Light Rail Service?
That’s the provocative question asked by analyst Marc Joffe in a recent Reason Foundation commentary. The VTA light rail project already had the lowest ridership in the country prior to the COVID-19 pandemic, with farebox recovery of as little as 12% of operating expenses. The light rail line suspended operations in May following a tragic shooting at a VTA maintenance facility. Joffe suggests that the system’s right of way could be served by electric buses at lower cost and with greater flexibility, since they could leave the right of way when appropriate. 

Bill Would Repeal but Not Replace Truck Excise Tax
Trucking interests have won bipartisan sponsors for S.2435, which would repeal the 12% federal excise tax on the sale of heavy-duty trucks and trailers. Supporters note that cutting the effective price of trucks and trailers would make it less costly for trucking businesses to replace older trucks with new ones. But what about the trucking industry continuing to pay its “fair share” of the cost of federal highways? The heavy-truck tax raised $5.1 billion for the Highway Trust Fund in 2019, half as much as the $10 billion raised from the diesel tax, according to the Tax Foundation. Unless the bill increased the diesel tax to make up for the loss, trucking’s “fair share” would be reduced by one-third.

Indiana Toll Road Opens Broadband Project
The Indiana Toll Road Concession Corporation and eX2 Technology announced on August 3 the completion of a fiber optic communication system along the full length of the 157-mile toll road. The system supports an array of ITS devices along the toll road. It also was built with additional capacity that could serve as a backbone for community broadband expansion in northern Indiana. Revenues from the system are used by ITRCC to assist with the toll road’s ongoing improvements.

Florida DOT Planning for Extended Orlando I-4 Expansion
With its $2.9 billion “I-4 Ultimate” 21-mile express toll lanes project on I-4 through Orlando nearing completion, the Florida Department of Transportation (FDOT) is considering what comes next. Its “Beyond the Ultimate” project is reviewing future I-4 travel growth both north and south of Orlando. (I’ve been stuck in seemingly endless congestion on I-4 south of Orlando, which is apparently chronic). The potential southern extension would extend 20 miles past Disney World and connect to US 27, while the northern extension would also be 20 miles, through Sanford as far as SR 472. FDOT has funding for two of the five planned segments, which “could” include toll lanes.

Response to Reason Commentary on Express Toll Lanes Equity
An analyst at WSP took issue with one statement in my Reason commentary on the University of Washington study of the equity implications of the I-405 express toll lanes in the eastern suburbs of metro Seattle. He noted my statement that the largest net benefit (per trip) accrued to the lowest-income quintile of users, he noted the following additional finding in this excellent study: “Because higher-income households take more trips, they accrue significantly more net benefits in aggregate than lower-income users.” That’s certainly true, but it does not negate the point that it is large net benefits for the trips they take that leads lower-income people to choose the express toll lanes for time-critical trips.

Green Industrial Policy in Bipartisan Infrastructure Bill
Policy analyst Scott Lincicome writes an excellent newsletter on economics and public policy. I commend to you a recent one called “Green Industrial Policy Is Back (Again).” In the piece, Lincicome identifies a number of well-intended environmental initiatives in the bipartisan Infrastructure Investment and Jobs Act. They significantly resemble many previous federal energy and environmental projects that sought to pick winners and ended up (for various reasons) all too often producing losers.  He doesn’t just opine on this; rather, he cites Inspector General and Government Accountability Office reports documenting the extent of dud projects that cost taxpayers billions of dollars with very little to show for them.

High Density, High Rises, and GHG Emissions
A journal article in Urban Sustainability questions the idea that the best urban form for minimal greenhouse gas emissions is high density in high-rise buildings (such as in Manhattan and many other downtowns). Francesco Pomponi and four co-researchers devised a method of analyzing the life cycle GHG emissions from four types of urban models: high-density high-rise, low-density high rise, high-density low-rise, and low-density low-rise. They found that high-density low-rise yielded the lowest life-cycle carbon emissions. As they note, “These results counter the claim that building taller is the most efficient way to meet the demand for urban space.”

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Quotable Quotes

“Ezra Klein mentions Aron Levy on transportation projects and environmental review in ‘How Blue Cities Became So Outrageously Unaffordable.’ …[European countries] don’t enforce their environmental legislation through litigation. The enforcement mechanism is not that individual people sue the government. The transportation researcher points out that in many countries, like Italy, planning authorities perform these kinds of things in-house. It’s not done through lawsuit enforcement.”
—New York University Marron Institute Newsletter, Aug. 4, 2021

“Individually owned cars will remain a big part of the new ecosystem. They are still the world’s preferred means of transport. For every ten miles travelled, Americans use the car for eight, Europeans for seven, and Chinese for six. Even in Europe, which is friendlier to public transport than America or China, only one in six miles was traveled on buses, trains, and coaches in 2017. Uber accounts for just 1.5% of total miles driven in its home market, the U.S. The pandemic has in some ways cemented the car’s pole position. Many people have shunned shared vehicles, be they cabs or buses, for fear of infection. A survey of American travel habits by LEK, a consultancy, showed that car journeys declined by just 9% last year (2020), compared with 55-65% for public transport and ride-hailing.”
—Michael L. Sena, “The Future of Mobility Is Slowly Coming into Focus,” The Dispatcher, June 2021

“What has been missed are the fundamental reasons for adopting a mileage-based [MBUF] system, namely the user-pays principle, which historically has been the bedrock principle of road financing in the United states, and equity: drivers should be fairly assessed for the cost of building and maintaining the roads they use. . . . Yet our user-pays-based financing system is no longer viable in its current form. . . . Road use is still high, but fuel consumption is poised to shrink dramatically due to highly efficient and electric vehicles. . . . The equity question is whether it is fair to require that only gasoline and diesel-fueled vehicles pay for the road while electric vehicles travel free. The goal of a mileage-based fee system is not to punish vehicle classes but to put in place the framework for a user-pays financing system which is equitable and sustainable.”
—Peter J. Basso, “Lessons Learned from the Surface Transportation System Funding Alternatives Program,” testimony before the Senate Committee on Environment and Public Works, April 14, 2021

The post Surface Transportation News: Problems with electric vehicles, freight rail innovation in jeopardy, and more appeared first on Reason Foundation.

In this issue:

• Bipartisan infrastructure bill: the good, the bad, and the ugly
• Private activity bonds and P3s in the infrastructure bill
• Why “Buy America” harms urban transit
• Equity for electronic tolling customers
• Response to DOT query on transportation equity metrics
• Correction re: new high-speed rail article
• News notes
• Quotable quotes

Bipartisan Infrastructure Bill: The Good, the Bad, and the Ugly

As I write, the United States Senate is finalizing and seems poised to pass, what is now called the Infrastructure Investment and Jobs Act (IIJA). A few of the final details may change, but this 2,700-page infrastructure bill (as introduced) incorporates much of what Senate committees dealing with transportation and public works had already agreed upon in the context of reauthorizing the surface transportation program—the Fixing America’s Surface Transportation Act (FAST Act), which expires Sept. 30. To those transportation provisions, the infrastructure bill adds a number of other categories of infrastructure (broadband, water utility service, electrification, and other energy topics). The infrastructure bill was introduced as an amendment that replaces the House surface transportation reauthorization bill. Thus, the intent here is to wrap up into one bill both a one-time infrastructure program and the upcoming five-year FAST Act reauthorization.

From my perspective, there are some good things in the bill, many more bad things, and a truly ugly thing. Let’s take them in that order.

The Good

The bipartisan Senate drafters took to heart the urging of groups including Reason Foundation, the Bipartisan Policy Center, Business Roundtable, House Problem Solvers Caucus, and many business groups that private capital investment should be encouraged as part of addressing the country’s infrastructure needs. The infrastructure bill includes three key provisions regarding private investment. The bill:

• Increases the federal cap on tax-exempt surface transportation private activity bonds (PABs) from $15 billion to $30 billion. This is not enough, but it is a step in the right direction. It should have also clarified the law to make clear that PABs can be used not only for new facilities but also to rebuild existing highways, bridges, etc. This would be consistent with the president’s “build back better” goals.
• Provides for $100 million in grants to help state and local governments develop public-private partenrship (P3) procurement processes, which should help expand the P3 market.
• Requires projects larger than $750 million that apply for Transportation Infrastructure Finance and Innovation Act (TIFIA) or Railroad Rehabilitation and Improvement Financing (RRIF) loans to engage in value for money (VfM) analysis (to see if P3 procurement provides greater benefits than conventional procurement).

There were no such provisions in the House bill.

Second, it provides modest procurement reforms, including making permanent the Title 41 reforms from the FAST Act, but does not reinstate the previous administration’s One Federal Decision policy that President Joe Biden rescinded soon after taking office.

Third, it did not include the House bill’s short-sighted repeal of the pilot program that permits toll-financed reconstruction and modernization of three individual Interstate highways (Interstate System Reconstruction and Rehabilitation Pilot, ISRRPP). What the bill should have done is liberalized that program to permit all states that want to use this approach to do so—and for all their aging Interstates. This would cost the federal government zero; it would simply repeal an obsolete ban on tolling.

Fourth, thanks to a nearly unanimous amendment on Aug. 3, the infrastructure bill requires the Department of Transportation (DOT) to finally do a highway cost allocation study, the first one since 1997, as a basis for evaluating who pays how much in highway user taxes compared with how they use the highways.

Finally, in terms of focusing more on “hard” infrastructure, the infrastructure bill is better, or far less bad, than the House bill that it’s intended to replace.

That’s all I’ve found thus far to celebrate, though I haven’t read all 2,700 pages (and, unfortunately, neither have many members of the Senate).

The Bad

The list of bad things in the bill is somewhat longer, but I will focus on just four primary problems.

First, I was pleased to see a provision in the infrastructure bill calling for a national mileage-based user fee pilot program. We’ve learned a lot from federally-assisted state and multi-state pilot projects over the past decade, but there are greater complexities in a potential national mileage-based user fee system that have not been seriously researched yet. Much of what the program in the bill calls for makes sense. It was only when I got near the end that I found a huge problem. All the MBUF pilot programs thus far have charged only hypothetical per-mile charges, and compared each user’s MBUF “bill” with the amount of state fuel tax paid for driving the same miles. But this national pilot program, as currently written, seems intended to actually collect a federal mileage-based user fee and deposit the revenues in the federal Highway Trust Fund. This violates the basic premise—stressed to participants in the state pilot projects—that a federal or state mileage-based user fee is supposed to be a replacement for fuel taxes, not charged in addition to gas taxes. I’m told that there will be an attempt to fix this provision, but if it remains part of the program, it could undercut the progress made in state MBUF pilots whose participants came to see the mileage fee, correctly, as a replacement funding source. By contrast, if incorrectly tested and implemented, the new federal program could easily be termed “yet another tax increase” by many, including opponents looking to prevent an eventual shift from gas taxes to mileage-based user fees.

Second, although the Senate bill included a provision similar to the House bill allowing electric vehicle charging facilities to be located at rest areas on Interstate highways, it was removed at the last minute over what has been described to me as one Republican senator having thrown a fit to get it removed from the bill. This provision for charging stations at rest areas has support not only in the electric vehicle community but also among a growing number of state transportation departments and even some trucking organizations. Its removal is especially ironic since one of the key architects of the bill, Sen. Rob Portman (R-OH), in 2012 cosponsored a bill to repeal the federal ban on commercial services at rest areas.

Third, the infrastructure bill largely accepts the basics of the Biden administration’s approach to expanding broadband internet service to rural areas. The plan insists on costly, uneconomical fiber optics for broadband in low-density rural areas and would provide federal funding only to government or co-op providers (modeled on Franklin Delano Roosevelt’s rural electrification program). Unfortunately, the bill would lavish $65 billion more on this foolish approach even as three private companies (Amazon, Oneweb, and SpaceX) are investing their own billions to provide global satellite broadband service to rural areas. For some perspective on this, see this recent post by Reason magazine reporter Eric Boehm.

Fourth, at a time when the future of urban mass transit is very much in question due to the long-term effects of the COVID-19 pandemic on workplaces and residential changes, the prudent course is to restore previous transit service (and address very large deferred maintenance backlogs) before making any commitments to expanding, in particular, costly rail transit lines. Yet, the infrastructure bill dramatically expands funding for New Starts capital projects, while making only a modest commitment to “state of good repair.” Whatever happened to the “fix-it-first” mantra of groups like Transportation for America? And the same can be said for the huge increase in funding for Amtrak, which handles far less than 1% of all inter-city passenger miles of travel and serves only a fraction of the routes served by generally self-supporting inter-city bus companies.

The Ugly

The infrastructure bill continues Congress’ accelerating retreat from the principle of users-pay/users-benefit. First, it adds another $118 billion bailout of the Highway Trust Fund using (borrowed) general fund money. Added to previous bailouts of the Highway Trust Fund since 2008, the bailouts to the fund now total $271.8 billion. In my April 2021 testimony before the U.S. Senate Committee on Environment and Public Works, I pointed out that if Congress used all the highway user tax revenues to fund only federal highway programs, there would be no looming trust fund “insolvency.” Since mass transit, sidewalks, bike paths, and a variety of other things that Congress funds out of highway user taxes don’t generate any meaningful federal revenue, they are appropriate candidates for subsidy. But that’s no reason to make highway users pay for them.

Far beyond that problem, is the generally pathetic set of “pay-fors” cobbled together to allegedly cover the large fraction of new spending in this massive bill. And for highways and water utilities, where users-pay/users-benefit has been the funding framework for at least the past century, there is really no excuse for making businesses and upper-income taxpayers pay for needed investments in better highways and water supply. To be sure, the IIJA is being billed as a one-time effort to improve U.S. infrastructure, while also helping an already-booming economy to “recover” from the impact of the COVID-19 pandemic. But the bill’s funding gimmicks, much of which will likely not materialize (meaning even more deficit spending) sets a very bad precedent for the future of infrastructure funding and federal spending. It also appears to violate the federal “PAYGO” law, which is still in effect (see more on this in quotable quotes below). As this newsletter was being written, the Congressional Budget Office released its finding that the infrastructure bill is likely to increase the federal budget deficit by $256 billion over 10 years. That’s not exactly “paid for.”

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PABs and P3s Retained in Bipartisan Infrastructure Bill, Despite Misunderstandings
By Marc Scribner

In the days leading up to the agreement on the bipartisan infrastructure deal, it became known in Washington, DC, that infrastructure financing—and specifically, private activity bonds (PABs)—remained a sticking point with negotiators. Some senators were apparently alarmed to learn that private activity bonds and public-private partnerships (P3s) could not be counted as “pay-fors” or offsets to the infrastructure bill’s spending provisions and would in fact count against the Treasury due to budget scoring rules. Supporters of P3s and PABs quickly responded, attempting to explain what PABs are and what they are not, and why they are critical to modernizing America’s infrastructure.

First and foremost, a public-private partnership and private activity bonds potentially used in that P3 are not funding sources. Rather, a public-private partnership is a project procurement method for states and a private activity bond is an important financing component in those procurements. Private activity bonds, especially a tax-exempt category called exempt facility bonds, typically provide financing for 20-30% of a P3 project’s total cost. Exempt facility PABs have been used successfully in a variety of projects, and for megaprojects, $12 billion has been leveraged to support $45 billion in project activity, a ratio of $1 leveraging to $3.75.

Unfortunately, the most important infrastructure exempt facility bond category—highways and surface freight transfer facilities—is subject to a lifetime national volume cap of $15 billion. As of May, the U.S. Department of Transportation reported that 99.93% of that volume had been exhausted, meaning the cap would need to be significantly raised or eliminated to allow states to finance needed highway projects through P3s. Absent reform, states would be unable to transfer infrastructure financing and construction risks away from taxpayers to private investors, which is what makes this model so appealing to good-government advocates.

After learning that P3s are not funding sources, the double-whammy for some senators was that longstanding budget scoring practices show PABs reducing federal tax revenue and, if the bill is to be paid for, requiring additional funding offsets to break even. The core issues here lie with the Joint Committee on Taxation (JCT), which assumes that projects financed by exempt facility PABs would have otherwise been completed with taxable commercial bonds. Thus, the JCT scoring logic goes, the use of tax-exempt PABs would deprive the Treasury of the taxes paid on interest income from those hypothetical taxable bonds. In reality, it is far more likely that if tax-exempt exempt facility PABs were unavailable, most of the projects in question would have eventually been financed by tax-exempt municipal bonds—which are not subject to any volume cap.

Despite the dubious assumptions used in the JCT scoring of PABs, it is important to understand that the estimated tax revenue reductions are extremely small when compared to the size of the larger bill. Based on previous JCT scores, a $10 billion increase in the highway or surface freight transfer facility PAB cap might score in the vicinity of $300 million over a five-year bill. But that additional $10 billion in bonding capacity could be leveraged to support nearly $40 billion in project activity, a very good bargain when compared to the $550 billion in new federal spending contained in the bill.

Even eliminating the cap altogether to support a much more ambitious P3 infrastructure scenario—such as one that would allow for reconstruction of the aging Interstate system at an estimated minimum cost of $1 trillion—would not break the bank per the scoring rules. When the Obama administration suggested a massive expansion of exempt facility PABs with its Qualified Public Infrastructure Bond proposal, it scored at less than $5 billion over JCT’s required 10-year window.

To be sure, tens or hundreds of millions of dollars each year isn’t pocket change, but these largely illusory on-the-book costs are vanishingly small when weighed against the hundreds of billions of dollars in new government spending contained in the infrastructure bill. Whether more modest or more ambitious, no proposal to expand PAB capacity for surface transportation infrastructure ought to alarm congressional fiscal hawks—especially when the large project financing and fiscal risk transfer benefits to taxpayers are considered.

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Why “Buy America” Harms Urban Mass Transit
By Baruch Feigenbaum

Like President Donald Trump before him, President Joe Biden supports economic protectionism that is increasing the cost of transportation projects amd limiting mass transit options for working-class Americans. In January, President Biden signed an executive order strengthening “Buy American” provisions. This longstanding policy mandates that federal infrastructure projects use American construction materials.

A separate Buy America Act, passed in the 1980s, imposes those requirements on all mass transit projects that receive federal funding. While this law has been in effect for the past six presidents, President Biden seems somewhat more committed than most to these “America First” policies—even opening a Made in America office to enforce the regulations.

These laws can be waived if the cost of using American materials is 25% higher than international materials. But in that case, companies have to apply for a waiver, which they never received during the Trump administration and show no signs of receiving during the Biden administration.

The rationale for these policies is twofold. First, limiting international competition creates American jobs and increases manufacturing wages. Second, the U.S. needs a robust manufacturing sector for the middle class. The problem is that Buy America does not accomplish either of these goals.

Even when it was subject to competition, American subway manufacturing was far from state of the art. For example, as Alon Levy points out in “Why Buy America is Bad Law,” the New York City subway ordered two new railcars in the 1970s, the R44 made by the St. Louis Car Company and the R46 made by the Pullman Company. The R44 had three times the failure rate of other train cars leading the New York State comptroller to recommend suing the company. The R46 had defective brakes, which also led to a lawsuit. Both companies exited the railcar business.

Today, any railcar company wanting to do business in the U.S. needs to open a factory in this country. Given that the overall U.S. market is small, and companies often make cars for one specific agency, there has been little innovation. Step on a heavy rail car built in 2020 and the main difference between it and one built in 1980 is vinyl flooring instead of carpeting.

And using 1980s technology in 2021 increases costs. New York’s next round of subway cars cost $130,000 per linear meter, while Los Angeles’ light rail cars cost $140,000 per meter and San Francisco’s Muni cars cost $170,000 per meter. The average cost in Europe is less than $100,000 per meter. Caltrain and New Jersey Transit Vehicles cost 35% and 60% more, respectively, than their European counterparts.

Buy America affects more than just rail lines. As Scott Beyer and Ethan Finlan point out in “The High Cost of Protectionism”, the Mike Bloomberg New York City mayoral administration wanted to convert one Staten Island Ferry boat to run on liquefied natural gas (LNG), which would have cut the boat’s fuel costs in half and reduced greenhouse gas emissions by 25%. But there were no LNG engine manufacturers in the U.S and the city was unable to receive a waiver, killing the project.

Even Amtrak, already an inefficient operation with bewildering accounting practices, has been affected by Buy America. In 2008, the agency wanted to buy additional double-decker rail cars. Without Buy America the agency would have purchased cars from the Japanese firm Nippon Sharyo, and that would be the end of the story. But with Buy America, the Japanese firm had to build a $100 million plant in the U.S., increasing the costs of the cars and delaying the project’s timeline.

But, perhaps the worst part of Buy America is that it fails at its primary mission of creating jobs and increasing wages. Creating light rail car construction jobs in Los Angeles cost $1 million per job, yet they pay only $40,000 per employee. And the jobs are temporary, lasting only a few years. A contract for the Massachusetts Bay Transportation Authority in Springfield created 200 jobs at a cost of $6.5 million per job, with the majority of the salary money going to management jobs.

Despite 40 years of Buy America policy, we haven’t seen a domestic rail car industry develop. Why? The answer, in part, is that federal regulations don’t alter the laws of economics. Even though taxpayers have spent billions and billions of dollars on new heavy-rail, light-rail, and commuter-rail track and rolling stock, there aren’t enough rail systems in the U.S. to make domestic production cost-effective.

Buy America doesn’t help middle-class industrial workers and it harms working-class commuters. Many working-class commuters are transit-dependent, relying on buses or trains to get to work. But increased transit capital costs often result in fewer trains and bus lines operating. And those that do operate often have longer headways, making commuting more challenging for workers. The primary goal of U.S. mass transit policy should be to make accessing jobs for transit-dependent workers easier, not more difficult.

Policy analysts across the political spectrum, from Kyle Pomerleau of the American Enterprise Institute to Jason Furman, who chaired President Barack Obama’s council of economic advisers, want to get rid of Buy America policies. Advocates for all modes of transportation, ranging from Angie Schmitt at Streetsblog, who believes in government subsidies for bicycling and walking projects, to Randal O’Toole at the Cato Institute, who supports only projects that pay for themselves, recognize the problems created by these policies and want to kill Buy America regulations. Unfortunately, many politicians foolishly think they can “protect” American manufacturing jobs and build cost-effective transportation projects at the same time. In reality, they do neither. The time to end Buy America is now.

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Equity for Electronic Tolling Customers

The COVID-19 pandemic accelerated an ongoing transition to cashless tolling across the country. Most customers appreciate the lack of long lines at toll booths and the convenience of all-electronic tolling, usually with a transponder on the windshield. But these programs almost always require a pre-paid account with access to either a credit card or a bank account. That’s fine for most of us, but what about customers who lack a credit card or bank account?

In 2019, at least 5.4% of U.S. households were “unbanked,” lacking either a credit card or a bank account. Several times that many were “underbanked,” meaning that while they have an account, they conduct most transactions in cash. These people could pay tolls based on their license plate number, but that requires billing and collection, which almost always means service charges and/or higher toll rates. Since most unbanked and underbanked households have low incomes, having them pay more than most others to use toll roads is clearly inequitable.

Fortunately, several toll road operators have come up with ways for the unbanked and underbanked to have cash-based toll accounts that use the same transponders as everyone else. As documented in a new Reason Foundation policy brief, the urban toll road system in Puerto Rico pioneered this change. In 1999, more than 50% of the licensed drivers in Puerto Rico did not have a bank account, and close to 75% did not have a credit or debit card. But most people had cell phones, and there were prepaid cell phone programs in operation, with people replenishing their accounts in cash at point-of-sale (POS) terminals in retail outlets.

Puerto Rico’s new AutoExpreso cashless electronic toll program adapted this POS cash replenishment concept. Initially, the toll agency signed up Texaco, with over 250 gas stations on the island, as the initial host for new POS terminals. Other retailers soon joined the program, making it easy for potential customers to find a convenient place to sign up, and to replenish their accounts with cash. Besides getting a transponder, each AutoExpreso customer received a magnetic stripe card, to use when their account needed to be replenished with cash. These accounts are anonymous, linked only to the account number on the magnetic stripe card.

AutoExpreso proved so popular that large numbers of people with bank accounts and credit cards also opened cash-based, anonymous accounts. Within two years of its introduction, more than 50% of rush-hour vehicles on the San Juan toll roads had enrolled in the program. That very large shift from cash payments at toll booths to electronic tolling eliminated chronic congestion at the toll plazas. By 2005, more than 2 million transponders were in use in Puerto Rico.

This success did not go unnoticed. In 2010 Florida’s statewide SunPass electronic tolling system introduced a similar program for those without credit cards or bank accounts. Like the Puerto Rico program, it makes use of POS terminals at over 3,100 retail outlets near Florida toll roads (and at Florida’s Turnpike service plazas). Replenishing the account with cash is standard, and the account can be anonymous, like many of those in Puerto Rico.

Several other toll road operators have created similar programs. They include New Hampshire DOT’s E-ZPass Reload Card, the San Francisco Bay Area FasTrak cash deposit and replenishment program, and the North Texas Tollway Authority’s ZipCash program.

These new programs are win-win solutions for unbanked and underbanked customers, as well as the toll road operators. They give participants a more convenient way to pay tolls (electronically) and at the lowest toll rates. And the toll road operator avoids the high costs of billing and collections. All toll road operators should consider such programs, especially those in states with high proportions of unbanked and underbanked populations.

The new policy brief is “Providing Electronic Toll Collection to the Unbanked and Underbanked,” by Daryl S. Fleming.

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US DOT Should Consider Access Across Modes as an Equity Measure
By Marc Scribner

In May, the U.S. Department of Transportation (USDOT) published a Request for Information on transportation equity data. This came in response to President Biden’s Executive Order 13985, signed in January, which directed federal agencies under his control to “pursue a comprehensive approach to advancing equity for all, including people of color and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality.”

In July, I replied to USDOT with a comment letter on behalf of Reason Foundation. Those comments discuss the documented relationship between access to automobiles and labor market outcomes, as well as highlighting the large disparity in access to jobs between drivers and transit riders in America’s 50 largest metropolitan areas.

During the 1960s, transportation economist John Kain developed what came to be known as the spatial mismatch hypothesis. Kain and others suspected that advances in transportation technology and resulting changes in firm and household location choice affected labor markets in a way that particularly disadvantaged African Americans. Employment growth that increasingly clustered in auto-oriented suburbs was leaving behind black metropolitan area workers who continued to disproportionately reside in carless households located in central cities.

The impacts on employment outcomes of both spatial mismatch generally and automobile access specifically are still being debated, but the broad consensus is that spatial mismatch is real and that disparity in car access explains some of the diminished labor market outcomes observed in underserved communities. Notable studies on these questions have found:

• The differences in the number of cars per adult household member account for 43% of the black-white employment disparity and 19% of the Latino-white employment disparity.
• The successful job search completion gap between white and black workers would be reduced by 8% if black workers had the same car ownership rates as their white counterparts.
• Among single mothers, car ownership often doubles the probability of employment and results in large increases in the number of hours worked per week.
• Car ownership is a significant predictor of employment (positive) and welfare use (negative).
• Auto access significantly reduced poverty exposure among participants in a Department of Housing and Urban Development housing assistance program.

Fortunately, auto ownership rates have been converging between disadvantaged communities and the national average for decades. In the case of racial and ethnic minorities, this trend has been pronounced.  For instance, in 1970 the percent of all households with zero cars available stood at 17.5%, but 43.1% of African-American households lacked access to a car at that time—a gap of 25.6%. By 2018, that had fallen to 8.5% carless overall and 18.1% of African-Americans—a much smaller gap of 9.6%.

For those relatively few Americans who continue to rely on mass transit, transit system performance in connecting people with places leaves much to be desired. The University of Minnesota’s Access Across America series shows that in 2019, those residing in the 50 largest U.S. metro areas could on average access 47% of metro area jobs by car in 30 minutes of travel (or one hour of bidirectional daily commuting). By contrast, just 8% of jobs were accessible by transit in 60 minutes (or two hours of bidirectional daily commuting). Even in the New York City metro area, by far the most transit-oriented American metro area, and where more than 40% of total U.S. transit trips take place, drivers can access 13% of New York metro area jobs in 30 minutes versus just 14% of jobs accessible in 60 minutes by transit.

The COVID-19 pandemic worsened transit’s already negative outlook, where transit’s pre-pandemic national market share stood at only 2.6% of total person trips and 5% of commuting trips. When the pandemic struck and people understandably feared sharing crowded spaces with strangers, mass transit ridership collapsed by 95% at its worst.

Today, ridership remains down by more than half of its 2019 level, while automobile vehicle-miles traveled have basically recovered to the pre-pandemic baseline. Contrary to frequent claims that transit has been chronically underfunded in the U.S., transit was already receiving nearly 30% of total federal, state, and local spending on highways and transit, according to the Congressional Budget Office. That does not include the roughly five years’ worth of normal annual federal funding that transit agencies have received since March 2020.

Reason’s comments encourage USDOT to consider job access by mode as an important equity measure, as well as contemplate the likelihood that policies perpetuating transit dependence and limiting auto access may also perpetuate unemployment and poverty, particularly among disadvantaged communities who still experience reduced automobile access and resulting benefits relative to the national average.

The full comment letter of Reason Foundation in response to USDOT’s Request for Information on transportation equity data is available here. It includes citations of the studies noted in this article.

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Correction re: New High-Speed Rail Proposal Article in the July Issue

An alert reader emailed promptly after receiving the July issue of this newsletter, questioning my assessment of the cost of the high-speed rail (HSR) portion of the hugely ambitious North Atlantic Rail (NAR) proposal. As you may recall, the NAR proposal is for true HSR (dedicated right of way, including major tunnels) between New York and Boston, plus many Amtrak upgrades in New England and some new regional rail projects. From a map of what the NAR website designated as priority corridors, I estimated the route miles of each and then applied recent unit cost numbers for each type of rail project.

The reader questioned one of those unit costs: $1.3 billion per mile for the high-speed rail portion, which seemed unbelievably high. Turns out he was correct. I derived that number from Amtrak’s NEC Future Tier 1 EIS, dividing the total cost of that proposed HSR project by the number of route miles. My error was to use the HSR route miles from the NAR proposal (New York-Boston) rather than the route miles from the Amtrak NEC Future study (Washington to Boston). Correcting this error led to a revised unit cost for NAR’s HSR portion of $875 million per mile. That revised unit cost number yields an estimated cost for the HSR portion of NAR of $234 billion. Adding the additional costs of the priority Amtrak-upgrade and new regional rail lines in the NAR near-term plan and the revised total cost estimate is $246 billion. That’s more than double the cost estimate in the NAR material: a mere $105 billion.

And that’s before taking into account typical passenger rail megaproject cost overruns. The classic study by Bent Flyvbjerg and colleagues using a global database of 258 highway and rail megaprojects found that the average passenger rail project exceeded original cost estimates by 45%. Were that to be the case with the North Atlantic Rail project, assuming it were ever built, the more likely cost would be $357 billion. That is 3.4 times the rosy-scenario $105 billion estimate from the NAR proponents.

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News Notes

Maryland Express Toll Lanes Megaproject Back in Plan 
In June, the Regional Transportation Planning Board had voted to remove phase 1 of the Maryland express toll lanes project from its long-range transportation plan in a poorly attended meeting. That decision was reversed by a large majority at the July meeting. Inclusion in the plan is a prerequisite to the project later receiving a federal record of decision (ROD) to move into implementation. Phase 1 of the $9 billion project will replace the bottleneck American Legion Bridge and extend the express toll lanes on I-495 in Virginia onto a stretch of I-495 on the Maryland side of the river and will also extend the toll lanes up I-270. If subsequent phases add such lanes to the rest of the I-495 Beltway, that will be a major expansion of the regional express lanes network.

Autonomous Vehicle Tests in Manhattan and Miami
Two new test programs for autonomous vehicles were announced in July. Unlike Waymo’s testing in low-density suburban Chandler, AZ, the new testing sites will be very dense urban areas. Mobileye announced that it was already under way testing camera-only autonomous vehicles in New York City, including Manhattan. And a day later, Ford, Lyft, and Argo AI announced a plan to test automated robo-taxies in Miami this coming winter. Lyft will charge regular rates for the robo-taxi rides. These programs will be much better tests of the ability of the companies’ automation systems than suburban driving.

Four Teams Short-Listed for Major Bridge Replacement in Louisiana
The aging and inadequate Calcasieu River Bridge on I-10 needs replacing with a wider, state-of-the-art bridge, a project estimated to cost $800 million. Having launched its first toll-financed P3 project (the Belle Chasse bridge) last year, the Louisiana Department of Transportation & Development selected a similar procurement model for the I-10 bridge. On July 15th, it announced a shortlist of the best qualified P3 teams. They are headed by AECON/Acciona, Macquarie/John Laing, Itinera/BCP Infrastructure Fund, and Cintra/Vinci/Meridiam. The four-lane bridge on a six-lane Interstate has long been a bottleneck.

Boost for Toll-Financing of I-10 Bridge in Alabama
Alabama DOT has come up with an alternative plan for at least partial toll financing of the new Mobile River Bridge on I-10. A far more ambitious proposal was rejected by local transportation planning bodies in 2019 due to an estimated $6 passenger car toll each way. Earlier this year, the local boards supported a trucks-only toll bridge, which would have been difficult to finance and, if restricted to trucks, of questionable value in relieving peak period congestion. ALDOT’s new proposal would charge $2 for cars and $15 for heavy trucks, which is far more realistic.

Thruway Service Plazas in $450 Million Remake
A 33-year P3 concession will rebuild and upgrade all 27 service plazas on the New York State Thruway. The agency announced early last month that construction on the first 10 plazas was expected to begin on July 29, with only their gas stations remaining open during the construction period. The project will include a wider array of food-service providers, with national brands including Shake Shack, Panera, Panda Express, and many more. The service plaza revamp is entirely privately financed, with Empire State Thruway Partners having financed the project based on its expected revenues from the various service providers. Similar service plaza P3 revamps have been completed for toll roads in Delaware, Florida, Indiana, and Maryland in recent years.

Miami Expressway Authority Fights for Its Life
Despite losing to the state government in court in April, the Miami-Dade Expressway Authority (MDX) continues operating its five toll roads in Miami, while the Miami-Dade County government plans a further appeal. The County contends that the 2019 state law (pushed for by anti-toll populists) abolishing MDX and replacing it with a severely constrained state-controlled agency violates the County’s home rule charter. County commissioners have appointed a new board, and the new appeal will be filed by the county government itself, rather than MDX. Meanwhile, the erstwhile replacement agency—GMX—still exists only on paper.

Transportation P3s Better at DBE Use, per New Study
A study by University of Maryland researchers Qingbin Cui and Kinqi Zhang used data from FHWA’s U.S. Major Projects Database to assess the extent to which highway construction projects met or exceeded disadvantaged business enterprise (DBE) goals. Their findings, published in TRB’s Transportation Research Record, showed that both long-term P3s and Design-Build/Construction Manager at Risk procurements did significantly better than tradition design-bid-build (DBB) procurements. They also found higher DBE participation the larger the project size. The paper is “Public-Private Partnerships and Social Equity: An Empirical Study of the Disadvantaged Business Enterprise Program,” Transportation Research Record, 2021.

Minnesota Joins E-ZPass System
The Minnesota DOT announced last month that as of August 2, its electronic tolling system for HOT lanes will be compatible with E-ZPass. That means replacement MnPass transponders will now work on express toll lanes and toll roads in 19 states across the Midwest and the east coast. There are no current toll roads in Minnesota, but three express toll lane projects are operational in the Twin Cities and a fourth is under development on I-35W.

Tesla Announces Start of Electric Truck Production
When Tesla first unveiled its prototype Class 8 Tesla Semi in 2017, it was expected to be on the market by 2019, then 2020, and now 2021. Tesla has been building a production line for the Semi near its Gigafactory in Nevada, aiming to produce five Semis per week by the end of the year. The company plans to use several of the first production models for its own use, but deliveries to reservation holders are now expected by late this year. Whether the Semi will deliver its originally announced range of either 300 or 500 miles, and its price points of $150K and $180K, remain to be seen.

Possible P3 for Miami Causeway Upgrades
A consortium headed by Partners Group has made an unsolicited proposal to Miami-Dade County to improve the Rickenbacker and Venetian Causeways. The former opened to traffic in 1947 while the latter dates back to 1927; both are tolled. The consortium proposed a DBFOM concession, presumably to be financed via toll revenue, to upgrade and modernize the causeways. Under county regulations, the project must be offered to potentially competing proposals, which will be the County’s next step.

Batteries First, Hydrogen Later—Amazon and UPS
At a webinar hosted by the Bipartisan Policy Coalition last month, two of America’s largest delivery companies both said that while hydrogen propulsion will have advantages, it is not yet ready for prime time. That’s true despite Amazon’s expectation that hydrogen fuel cell vehicles will be lighter, refuel faster, and have longer range than battery electric vehicles, a conclusion shared by UPS senior VP Tom Jensen. Both companies are moving heavily into battery-electric delivery vans, but see future prospects for hydrogen fuel cell power for their long-distance over-the-road transport needs. The discussion was summarized on Transport Dive, July 6, 2021.

Are EV Makers in Error by Using “Skateboard” Frames?
In a very thought-provoking article in the September 2021 issue of The Dispatcher, editor Michael Sena explores the question of whether the new generation of electric vehicle companies is making a mistake by foregoing the established “unibody” method of vehicle construction and reverting to the older and less-safe body-on-frame design. It’s a carefully researched and thought-provoking article that I highly recommend reading.

Possible P3 Bridge Replacement in Wilmington, NC
An unidentified company last November made an unsolicited proposal to North Carolina DOT (NCDOT) to replace the aging Cape Fear Memorial Bridge. Under the proposed long-term P3, the company would finance, design, build, operate, and maintain the new bridge, financed by tolls. In June NCDOT gave a presentation on the proposed project to the Wilmington Metropolitan Planning Organization (WMPO). The DOT said the proposal is credible and that a toll-financed bridge is one of the options it has been researching. After both county governments reviewed DOT’s assessment, WMPO voted not to support a tolled option. However, the Brunswick County commissioners on August 2nd voted unanimously to ask WMPO to look at all funding options, including tolls.

2021 Urban Mobility Report Released
How much was traffic congestion reduced in 2020, and how far had urban traffic recovered by year-end? Everything you might want to know about this, for several hundred U.S. metro areas, is presented in the Texas A&M Transportation Institute’s latest congestion report, released last month. It includes the familiar tables documenting, by individual metro area, the impacts of congestion on the metro area overall and on the average motorist. You can start your exploration of this important report here.

New Cato Institute Study Details High-Speed Rail, Here and Abroad
Advocates of large-scale investment in high-speed rail cite France, Japan, Spain and elsewhere as models; they also claim that U.S. HSR projects would attract very large numbers of travelers from air and highway travel. The empirical evidence for these claims is weak, as transportation analyst Randal O’Toole details in this well-documented (133 end-notes) new study, Policy Analysis Number 915 from the Cato Institute.

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Quotable Quotes

“As the House Budget Committee’s Democratic staff director for 20 years, I saw this nation go from record surpluses to record deficits and debt. That’s why Democrats passed a simple law in 2010 called ‘pay as you go,’ or ‘paygo,’ which states that if Congress wants to cut taxes or increase mandatory spending, it needs to pay for it. That law worked very well until Congress waived it in 2017 after passing the Trump tax cut . . . . Paygo is still on the books and we need to enforce it. We cannot rely on low interest rates to keep the cost of debt service low forever. Inflation is at its highest point in 13 years. If interest rates continue to rise, paying down and servicing debt will eventually become unmanageable, forcing new large tax hikes or spending cuts. It was smart to borrow when Congress passed Covid relief to jump-start the economy. But with strong economic growth projections coming from CBO and most private forecasters, we should start borrowing less and paying for more.”
—Thomas S. Kahn, “A Democrat Against Deficits,” The Wall Street Journal, July 29, 2021

White-collar workers are trading their expensive lives in the nation’s most densely populated areas for cheaper, greener pastures. Online real-estate company Zillow calls it the ‘Great Reshuffle.” . . .  The trend toward [more] car ownership could very well outlast the pandemic as exurbs sprawl. Less public transportation outside major urban metro areas means that even without a work commute people will continue to need a personal vehicle for daily activities like going grocery shopping or to the gym, said Deutsche Bank analyst Chris Woronka. As new residents settle down with their bigger homes, cars, and savings accounts, they are bound to cause a shake-up.”
—Laura Forman, “A Mass Migration to the Exurbs Remakes America,” The Wall Street Journal, June 26, 2021
 
Q: “What is your opinion on the history of U.S. 69 congestion and the plan to add express toll lanes?”
A: “We know that U.S. 69 is the most heavily trafficked road that we have in the state of Kansas. So it was imperative to come up with a solution to that problem. With Overland Park and KDOT working together, they were able to come up with a very creative, innovative, first-of-its-kind-in-Kansas solution. Instead of just adding more and more lanes, one of the [new] lanes [each way] will be a toll lane, and people have the option of using the toll lane during really heavily trafficked times or using the two remaining free lanes.”
—Gov. Laura Kelly to Leah Wankum, “Kansas Gov. Laura Kelly talks U.S. 69 toll lanes, pandemic recovery and vaccines in exclusive SM Post Interview,” Shawnee Mission Post, July 14, 2021

“King of Prussia light rail is hardly alone in exemplifying two pathologies of American transit planning: expansion for its own sake (rather than building as a result of actual demand . . . ), and making expensive concessions to placate a handful of change-averse residents. American cities are strewn with unused light rail lines in freeway margins or low-density industrial zones—where there may be no one to ride the train, planners think, but at least there’s no one to protest it. Neither pathology can be cured without two key reforms to the transit planning process. First, streamline public comments and environmental reviews to reduce the influence of small but vociferous interest groups. Second, end federal subsidies for transit capital projects, such as the New Starts program that may provide half of King of Prussia rail’s budget, that enable transit agencies to spend billions of dollars they don’t have on new rail lines they don’t need.”
—Connor Harris, “King of Prussia Rail Extension Is an Exemplar of Bad Planning,” Philadelphia Inquirer, June 7, 2021

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