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Saturday, October 25, 2008

Clean California travel

One of my first jobs was as a political reporter, including writing voter guides for our readers showing both sides of controversial issues. On next week’s California ballot, there are two propositions directly related to clean energy and a third indirectly related. Here I’ll write about the latter, and cover the former later.

Proposition 1A is the $10 billion rail bond measure. Like all California bond measures (or NSF funding budgets), it has been carefully crafted to buy off supporters in as many counties as possible, rather that fund the absolutely highest priority projects. If you compare Proposition 1A with the (now obsolete) Proposition 1, the main difference seems that the original plan emphasized LA-SF but the new plan attempts to fudge the issue.

Of the $10b, 90% is to start the California high speed rail initiative and 10% for misc. other local and intercity rail efforts. Some of the support comes from clean technology fans. With an ideal top speed of 200 mph, the high speed rail would be electrified — potentially from renewable energy — and thus presumably supplant passenger airplanes (which cannot yet run on electricity) and electric cars (which can make short but not long trips on stored grid power).

Only the “pro” side has enough money to run ads. If you listen closely, they are paid for by the Northern California construction industry, and the California heavy construction worker’s local, which would both benefit financially from the billions spent on a new rail system. Some of this is a point of pride: Europe and Japan have high speed trains but the US does not (Acela hardly counts). There is also a large constituency of those who like mass transit as a “green” solution, train buffs, and probably from a few places (like Fresno) that don’t get good air service. San José is happy because we beat out Oakland as the gateway city to the Bay Area. (Note to non-Californians: San Francisco is a great water and air hub but a terrible rail hub, especially since they removed the trains from the Bay Bridge).

Far less organized, the “con” side has two basic arguments. One is that this $9b (not counting the billion for unrelated projects) is just a down payment — only 20%of the amount needed to build the promised system. What are people voting for if they haven’t been told the final price, and if the initial investment isn’t enough to create a useful system on its own? The second is that the claimed prices and costs don’t seem to match — the $55 fare is much lower than other global rail fares.

I would count as a train buff. When I was trying to break into news photography, my most striking photos were of the Washington Metro and other transit subjects. have ridden the Shinkansen, EuroStar, TGV and German ICE trains. I try to prefer the train whenever it’s cost and time-competitive to a car or plane. I spend a lot of time trying to figure out the subway or light rail system whenever I visit a strange city, and use it (or commuter rail) to visit Boston, Chicago, DC or even downtown SF. If it is finished before I die, I would certainly be a regular user of the California bullet train. Today I regularly travel between Northern and Southern California, and before that I made many trips between the SD and LA regions.

However (as one friend used to say) my “spidey sense” is tingling. The $9b for high speed rail is 20% of the $45b the legislative analyst says the system will cost (such projects tend to run over). There is no guarantee that this first installment will finish anything useful (or revenue generating) without floating another $10 or $20 billion in bonds. If the state had put all $45b on the ballot at once, perhaps it would have been too threatening given that the state’s existing outstanding bonds are about $53b.

There’s also the curious wording on outside money. Half of the actual construction costs must come from “private” or “other public funds” but the bonds may be used to pay all the cost of studies, right of way and rolling stock. (Seems bass-ackwards to me — as with airlines or buses, it would make sense to have the government own the right of way but make private entities buy and operate the rolling stock). As a free market economist, I’m still a little puzzled by the failure to find a private operator (as once promised), which suggests that the system’s operating deficits need to be paid (or at least guaranteed) by taxpayers.

So will this be (as proponents say) permanent infrastructure that will be used for decades? Or (as opponents say) an expensive boondoggle? I think we’ll have to spend the money and build the system to find out.

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