Transcript Stimulus, Reauthorization, and Mobility

AMERICAN DREAM
COALTION
Stimulus, Reauthorization and
Mobility
Alan E. Pisarski
WHAT’S IN OUR FUTURE?
 STIMULUS PACKAGE
 TRUST FUND INSOLVENCY– AGAIN
 VMT DOWN 3.6%
 FUELS DOWN 7.1%
 HTF REVENUE DOWN 11.6% vs forecast
 REAUTHORIZATION OF SURFACE
TRANSPORTATION LEGISLATION
STIMULUS PACKAGE—ARRA
 789B$ TOTAL
 27.5B$ HIGHWAYS
 1.5B% DISCRETIONARY GRANTS
 Corridors, TIFIA, Earmarks




8.4B$ TRANSIT
1.1 AIRPORT IMPROVEMENT GRANTS
850m$ AMTRAK; 450M$ security
8B$ HSR (plan due yesterday)
Transportation lost in the game
 “We got rolled” John Mica Ranking Member
House T&I
 AASHTO had “5000 shovel ready projects”
worth about 66B$ (hwys only)
 Bill uses standard formulas; no St. match
 States taking varied approaches
 lots of small maintenance – paving, painting
 or few big ones (KS 4)
 Texas supporting toll road plans
 1,800 projects obligated ($5.6b) this week
Next Reauthorization
 Due Oct 1, 2009 (6 years usually)
 Highways and transit; HSR?
 Congress always misses due date; 12
CRs last time
 They say they will be ready this time
 I doubt it – new Admin., no $$$$$
Next Reauthorization (2)
 Who will be in charge? WH, DOT,
Congress?
 New Secretary Ray LaHood alone
 No Senior staff– some announcements
 DOT might prefer a CR so that they
could be serious players next year
 If meet September goal then DOT’s
role limited
Next Reauthorization (3)
 Finance, Finance, Finance
 Stimulus package will affect
decisions
 Tolling, congestion pricing disliked
by leadership but few options
 More afraid of gas tax increases
 Is private sector still ready with $$$
 Devolution by Default ??
Next Reauthorization (4)
 Maybe reorg DOT away from
modes to “functional structure”
= intercity; metro
 Metro mobility = transit, bikes,
walking
 Intercity; tourism weak
 Watch private freight rail
 New focus on land use policies
State of play in national
legislation – Financial issues –






Not close to increase in last cycle (40%)
Needs put at 2x funding
Fed Gas tax at 18.4¢ doesn’t = 3¢ in 1956
Fed share of capital about 40 %
Some opportunities regarding revenues
“Innovative Finance” as alternative
INNOVATIVE FINANCE AIN’T MONEY
THREEWAY CONFLICTS
 TRANSPORTATION LEGISLATION
 ENERGY LEGISLATION
 GHG LEGISLATION
 Cap and Trade – rebate or spend?
 Carbon Tax
 Air could catch brunt of plans after
roads
ALL ANTAGONISTIC TO MOBILITY
EFFICIENCY VS EQUITY
The Efficiency/Equity argument is
fundamental to any regulatory
process
 EQUITY = your responsibility for
share of solution should equal your
share of the problem!
 EFFICIENCY = do most costeffective first and solve more of the
problem per $
TRANSPORTATION
VS OTHER GHG OPTIONS
 Options for alternate
fuels in other sectors are
greater. MOST COST
EFFECTIVE
 Main focus should be
electricity generation.
 WHY IS
TRANSPORTATION
SINGLED OUT AS
ONLY SECTOR TO
HAVE OUTPUT CUT?
 No one suggests farm
output or industrial
output should be cut by
their share of GHG !
Impacts on mobility
 Energy; GHG = CUT VMT!
 Metro Mobility = Walk, Bike, Transit
 Coalition w/HUD = use Transportation $$
for land use coercion and subsidies
 Emphasis on Tolling/Pricing but not market
driven; pay-at-pump insurance
 VMT tax = tax travel based on where, when
and what you are doing
GOAL IS TO SUPPRESS VMT –
GHG IS JUST THIS YEAR’S EXCUSE
The policy conflict = opposed
thinking about the world










Neighborhood
Shorter trips
Walk/bike
Land use solutions
Design
What’s freight?
Accessibility
Public
Mass
Behavior change
Make it happen
Globally Integrated




Longer trips
Broad “community”
Choices
Market forces
 Major role for freight
 Mobility
 Private
 Personalized
 Technological fix
 Let it happen
The Right Answer Should At Least
Be Among The Options Available!
 This is A Real Problem even independent
of global warming
 Fuel costs
 Energy Security
 Economic Uncertainties
 This Is A Real Problem With Little
Resources
 FOCUS ON EFFICIENCY Selling Bad
Solutions To A Real Problem Should Be Out!
 Research / Economic Analysis /
Performance Measurement should be key
The focus on changing behavior
diverts us from the real issues








Enhancing economic opportunities
Access to workers; access to jobs
Mainstreaming minorities
Safety
Serving an aging population
Greater freedom of mobility
Infrastructure Reconstruction
More!
A closing thought – TRB 2009
 The major challenge facing the new
Secretary will be getting people to
take transportation seriously—to
recognize that the cost is not the
benefit, and it is what happens after
you build the road or the airport or
transit system that matters to our
future economic productivity and
national well-being.”
Thank you
Alan E. Pisarski
[email protected]
Next Reauthorization (5)
 Commissions are for cover or
temporizing!
 Two commissions said the same
thing – more $$ needed
 Commission mandated by SAFTEALU reported last month:
 need 10c for inflation and plan for
new non-petroleum based vehicle
mileage tax
The Federal Highway Trust Fund
becomes insolvent this year!
Next Reauthorization (5)
 Next week AASHTO will release its
Bottom Line estimates of investment
needs for highways and transit on the
hill (4th I have done)
State of play in national
legislation – Context –
 Difficult period – Economy,
Policy Conflicts, New Admin. ,
etc.
 Multiple transportation
legislative issues




Aviation
Amtrak
Rail freight
Maritime
 More temporizing actions likely
THE PRESENT LEGISLATIVE IMPASSE IS A
SYMPTOM OF THE FUTURE!
PREMISES
 USER-PAY TRADITION AS GUIDE
 FUNDING INADEQUATE –IN 2 WAYS
 CONGRESS/ADMIN. RELUCTANT ON
FUEL USER FEES BOOST
 BUT NOT READY FOR THE NEXT STEP
 ADVENT OF “POST GAS-TAX ERA”
 SHIFT TO STATE AND LOCAL LEAD
 WANT/NEED PRIVATE & PUB/PRIV.
PARTICIPATION; BUT HOW?
As the Interstate Era Came to a
Close
 No new vision emerged
 Nothing with the Interstate’s Power
 A Rich Funding System without a goal
 1¢ = $1.7 Billion/yr
 RESULT




Lack of Focus
Great Expansions of Eligibility
A Grant Program
Congressional “Earmarks”
Post-Interstate Era Legislation
 THREE 6 YEAR CYCLES
 1992-ISTEA
 1998-TEA-21
 2005-SAFTEA-LU (2 years 11 extensions)
 A new cycle begins this year
 Will the Congress continue to
temporize or will it launch a new era?
THE POST POST INTERSTATE ERA!
CONTEXT has two elements




FINANCE
INADEQUATE
FUNDING OF
HIGHWAY NEEDS
FUEL
EFFICIENCY
SOME
INFLATION
NEW POWER
SOURCES




POLICY
MANAGE SYSTEM
USE “MARKETPLACE”
USE PRIVATE
SECTOR
USE ECONOMIC
CONCEPTS
Transport is most dependent on
high energy density fuels

“Cost effectiveness (cost per tonne of CO2) is the
fundamental determinant of which abatement policies to
adopt and how much the transport sector should contribute
towards economy-wide CO2 abatement goals --- it is
important to achieve the required emissions reductions at
the lowest overall cost to avoid damaging welfare and
economic growth.”

“Transport and other sectors are expected to contribute less
to overall emissions reduction strategies.”
ECMT Council of Ministers Transport and Environment ;Jun
2006
U.S. Greenhouse Gas Emissions
28
Surface Transportation is the main
issue for now
U. S. Transportation Carbon Emissions by Mode, 2003
(Million metric tons CO2)
Pipeline/Other, 47
Internat'l./Bunker,
84
Waterborne, 58
Rail, 43
Air, 171
Light Vehicles,
1113
Heavy Vehicles,
350
A little Perspective Here!
How much are we really
talking about?
3.6% drop for year =
 Last year I drove 300 miles a
week [15,000 miles/yr]
 This year I drove 290 miles a
week
= 1 five mile trip lost per week
VMT trend is not just gas prices
 WEAK ECONOMY
 Discretionary trips in Vacation Season
 DEMOGRAPHY - a long term trend
VMT GROWT H RAT E PER DECADE
6
percent change
5
4
3
2
1
0
1950's
1960's
1970's
1980's
1990's
2000's
IS FUEL CHEAP AT 4$?
Cost/
gal
Fuel
Efficiency
1981
3.09
16.4
2007
2.85
22.4
12.7
cents
2008
4.00
23.7*
16.8
cents
2007$
approx.
Cost/
mile
18.8
cents
PLUS WE ARE 20% RICHER THAN THEN!
Would 5$ or 6$ gas change
America?
 LIFE STYLE PREFERENCES WILL DETERMINE
GOALS; AND TECHNOLOGY WILL RESPOND
 The consumer benefit of automobility is colossal
– think of toll costs = $4/gal
 Europe at $9/gal; still has traffic jams
 SERIOUS EFFECTS
 slower access to automobility of minorities
and lower income populations
 Rural stress
 Less access to broader worker pool
 Depresses auto sales
 FLEET TURNOVER RATE WILL BE KEY
THE GHG TRENDS ARE LARGELY
POSITIVE
 CO2 Is Almost Self-stabilizing
 Energy Intensity/GDP Declining about
2%/yr
 Energy Intensity/Capita will decline
.5%/yr
 Transportation VMT Slow Growth
 Vehicle Fuel Efficiency
 Demography
 Price Will Be Key Factor
Backgrounder #2
Energy, Environment and Economy
Institute of Transportation Engineers




Requested by ITE Board of Directors
A WIN, WIN, WIN Opportunity
Traced fuel issues and travel trends
Its all about efficiency
VMT Trends
 US decline in VMT in 2008 about
3.6%
 Still low now that Economy is driver
 Rural areas hit hardest around 9%
WE SAW THIS BEFORE
Historical Passenger Car VMT
change 1974-1984
19
74
19
75
19
76
19
77
19
78
19
79
19
80
19
81
19
82
19
83
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
-1.00%
-2.00%
-3.00%
-4.00%
-5.00%
VMT trend is not just gas prices
 NOW WEAK ECONOMY
 Discretionary trips in Vacation Season
 DEMOGRAPHY - a long term trend
VMT GROWT H RAT E PER DECADE
6
percent change
5
4
3
2
1
0
1950's
1960's
1970's
1980's
1990's
2000's
A little Perspective Here!
How much are we really
talking about?
3.6% drop for year =
 Last year I drove 300 miles a
week [15,000 miles/yr]
 This year I drove 290 miles a
week
= 1 five mile trip lost per week
VMT Response: Where did it go?
 TRIP CHAINING – Big  FREIGHT
payoffs
 Local
 CARPOOLING
Distribution
 Work – some gains
opportunities
 Non-work – more
 Load changes
 CUTS IN TRIP LENGTH
 Big Fleet
 CUTS IN TRIPS MADE
gains
 SHIFTS TO TRANSIT?
 Maybe 2%
WAS FUEL CHEAP AT 4$?
Cost/
gal
1981 2007$
2007
2008
3.09
2.85
4.00
Fuel Efficiency
Cost/
mile
16.4
18.8 cents
22.4
12.7 cents
23.7
16.8 cents
approx.
PLUS WE ARE/WERE 20% RICHER THAN THEN!
Would 5$ or 6$ gas change
America?
 LIFE STYLE PREFERENCES WILL DETERMINE
GOALS; AND TECHNOLOGY WILL RESPOND
 The consumer benefit of automobility is colossal
– think of toll costs = $4/gal
 Europe at $9/gal; still has traffic jams
 SERIOUS EFFECTS
 slower access to automobility of minorities
and lower income populations
 Rural stress
 Less access to broader worker pool
 Depresses auto sales
 FLEET TURNOVER RATE WILL BE KEY
A Question!
What Part Of Gains
In Air Quality In
The Past 20 Years
Have Come From:
What Part Of Gains
In Green House
Gases In The
Next 20 Years
Will Come From:
Technology
 95% to 105%
 Changed Behavior
+5% to -5%
 Technology?
 Changed
Behavior?
Potential impacts on new and existing
transportation infrastructure?
 Permanent inundation of roads, bridge
approaches
 Weakening of land, substructure supporting
roads, bridges
 Temporary flooding of roads
 Coastal Interior
 Increased stream flow, erosion and bridge
scour
 Pavement cracking, deformation;
44
King Gee, FHWA
REGULATION
 SAFETY of growing interest
 Major decline last year; why?
 CAFÉ – raised standard from current
27.5 miles per gallon standard to 35.7
miles per gallon by 2015. light trucks,
from 23.5 miles per gallon in 2010 to
28.6 miles per gallon in 2015
 GHG – BIG ISSUE
 Cap and Trade – rebate or spend?
 Carbon Tax
 Air could catch brunt of plans after roads
TRANSPORTATION
VS OTHER OPTIONS
 Options for alternate fuels in other sectors
are greater. MOST COST EFFECTIVE
 Main focus is, and should be, electricity
generation.
 WHY IS TRANSPORTATION SINGLED
OUT AS ONLY SECTOR TO HAVE
OUTPUT CUT?
 No one suggests farm output or industrial
output should be cut by 25%