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Monday, May 4, 2009

Basic BTU budget

The libertarian Cato institute is certainly one of the most (if not the most) skeptical thinktanks when it comes to government intervention. Thus, it’s not surprising that a column Monday opposes the president’s proposal to spend $13 billion in Federal money to support high-speed rail.

Without the math, I can’t verify the calculations by its transportation expert, Randal O'Toole. But he makes two interesting points.

One is the familiar one about mass transit. Mass transit is highly capital intensive, and thus arguing it’s cost-effective requires making assumptions about the long-term use and payoff for the investment.

Of course, individuals, firms and governments make many long-term investments. Some of these investments are indispensable, but others will only pay off based on the most optimistic assumption (or not at all). If the profitability is dependent on assumptions, then under some scenarios the investment is economically unsound.

The other point O’Toole makes is that recently the energy efficiency of trains is improving far more slowly than that for planes and automobiles:
According to the Department of Energy, the average Amtrak train uses about 2,700 British thermal units (BTUs) of energy per passenger mile. This is a little better than cars (about 3,400 BTUs per passenger mile) or airplanes (about 3,300 BTUs per passenger mile). But auto and airline fuel efficiencies are improving by 2 percent to 3 percent per year (for example, a Toyota Prius uses less than 1,700 BTUs per passenger mile).

By contrast, Amtrak's fuel efficiency has increased by just one-tenth of 1 percent per year in the past 10 years.
This is not Moore’s Law: there’s no guarantee that the trend will continue indefinitely, and in fact a lot of the improvements in airline fuel efficiency seem like one-time hits driven by high fuel prices. Again, I haven’t done the math, but I sure hope someone is.

Still, taken together, O’Toole raises a crucial point. Planes and trains remain in service for decades, and thus it takes a long time to phase in any improvements in efficiency. If light vehicles have an average age of 7-9 years, then between near-term improvements and rapid replacement cycles, the best energy policy might be to subsidize individuals purchasing hybrids rather than governments building rail transit.

(Full disclosure. I am a huge mass transit buff: I take the T, the Washington Metro, Caltrain, BART, VTA, Metrolink and the Coaster every chance I get. My biggest success as an aspiring photojournalist came from the 1981 inauguration of the San Diego Trolley. That doesn’t mean that I’d recommend inefficient use of other people’s money to humor those biases.)

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