This Week at Amtrak; April 6, 2009

This Week at Amtrak; April 6, 2009

A weekly digest of events, opinions, and forecasts from
United Rail Passenger Alliance, Inc.
America’s foremost passenger rail policy institute
1526 University Boulevard, West, PMB 203 • Jacksonville, Florida 32217-2006 USA
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Volume 6, Number 9


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1) Interesting words from Matt Rose, Chairman, President, and CEO of Burlington Northern Santa Fe Railway. His thoughts and comments mesh well with former FRA Administrator Gil Carmichael’s Interstate II vision.
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Written Testimony of Matthew K. Rose
Chairman, President and Chief Executive Officer
BNSF Railway Company
Before the House Committee on Appropriations
Subcommittee on Transportation, Housing and Urban Development
For a Hearing on "The Future of High Speed Rail, Intercity Passenger Rail, and Amtrak"
Wednesday, April 1, 2009

Good afternoon Chairman Olver, Ranking Member Latham and members of the Subcommittee. I am Matt Rose, the CEO of the BNSF Railway, and I appreciate the opportunity to testify before the Subcommittee today on the issue of high speed rail. As a freight railroad CEO, a member of the National Surface Transportation Policy and Revenue Study Commission, and an early supporter of the One Rail coalition, I’ve had a lot of opportunity to think about what our country’s vision for passenger rail ought to be.
I, too, have traveled to Europe and Asia and appreciate the perspective of those in the United States who ask why Americans can’t have what they have – 200 mph corridor service connecting dense population centers which, themselves, have efficient regional transit distribution. However, as I discovered in my work on the Commission, while many passenger rail advocates and policy makers at all levels of government are intercity passenger rail advocates, they are somewhat skeptical of this vision. Their appetite is for a more incremental approach of improving existing intercity passenger rail service. Perhaps conditioned by years of scant Amtrak budgets and Congress’s disinterest in a formal federal intercity passenger rail program, many also are concerned that some large metropolitan areas might not be included in a "bullet train" network, either due to unavailability of right of way or other market-based demand reasons. In the Commission deliberations, we had a very robust discussion about these issues.
The Commission clearly called for the kind of investment needed to support passenger trains operating at the highest speeds in sealed, passenger-only, separated right of way. It called upon Congress to see the future, as Europe and Asia have, and begin the process of developing a corridor system of truly high speed rail. Make no mistake about it – this is a trillion-dollar funding proposition. Such a system may be beyond our current means; but one certainly can envision the development of five to ten truly high speed passenger regional rail corridors that make economic and operational sense. California – where you would expect some of these corridors should be – has taken the difficult yet necessary steps toward a vision of 200-plus mph passenger trains, despite a challenging budgetary environment.
Importantly, the Commission report also specifically recognizes the contribution that less-than-highest speed passenger trains in corridors of fewer than 500 miles can make to the Nation’s transportation system. Existing Amtrak service outside the Northeast Corridor generally achieves 79 mph on freight rail tracks. Public investments made to enhance reliability of this service can yield tremendous on-time performance reliability benefits, which is often all that is needed to successfully satisfy demand for passenger service in certain markets. There are many examples of this, but most recently, BNSF completed several double track construction projects on behalf of the State of California, which are intended to further improve already good on-time performance levels for 79 mph service.
Speaking as a freight railroad CEO, it is possible to increase speeds from 79 mph to 90 mph on tracks that both freight and passenger trains use. Upgrades would include the implementation of Positive Train Control (PTC), which I’ll touch on again shortly. Track would need to be upgraded from Class IV to Class V track, which would lead to a step level increase in track maintenance and track component replacement. For example, a larger number of ties per mile would have to be replaced each year. Rail joints would have to be eliminated. Extensive and regular undercutting would have to be undertaken to eliminate sub-grade defects. Rail would have to be re-surfaced much more often. All of this, in turn, would lead to more frequent outages for needed work, which will make joint freight/passenger operations more challenging and expensive.
At sustained speeds in excess of 90 mph, passenger train operations will need to be segregated from freight operations on separate track. The level of maintenance work required, the very different impacts passenger and freight rolling stock have on the surface of the rail and managing the flow of train traffic with such differences in speeds would make the joint use of track uneconomic and impracticable. Furthermore, it is my belief that at these speeds all interface between passenger trains and road crossings will need to be eliminated by grade separations or crossing closures. While it may be possible in some instances to co-locate higher speed passenger tracks with freight tracks in a freight railroad’s existing right of way, that won’t always be the case, and other right of way should be obtained. Where it is possible for the public to purchase freight railroad right of way, we must ensure sufficient capacity remains to operate safely and protect the ability to serve freight rail shippers, present and future, on a corridor.
In sum, the Commission’s model for intercity passenger rail in this country is to develop the highest speed rail where feasible and economically viable, coupled with more reliability for 79-90 mph passenger service in other key corridors where it will continue to make sense from a density, utilization and cost perspective. We believe that this vision could finally generate the public support and political will necessary for a successful passenger rail system in this country.
During the Commission’s deliberations, Wisconsin DOT Secretary and Chairman of States for Passenger Rail Frank Busalacchi and the late, great Paul Weyrich and I spent a lot of time debating the provisions of the report that dealt with the passenger and freight rail interface. It was a worthy exercise because from it came a clear understanding of the importance of how freight and passenger rail are interdependent in today’s policy, political and economic environment. This is the origin of the OneRail coalition, which consists of passenger, freight and environmental interests and advocates for the benefits of both freight and passenger operations.
There were some basic principles around this interface upon which the Commission agreed. These are basic rules of fairness, which make public-private cooperation possible and fruitful. In my own experience, they have helped BNSF and many communities on the BNSF network – including Seattle, Chicago, Albuquerque, St. Paul/Minneapolis, and Los Angeles – realize a partnership that achieves outstanding commuter rail service without degrading present or future freight service. These communities recognize their stake in both passenger and freight rail service.
The first key principle is that access by passenger providers to freight rail networks, where reasonable, must be negotiated at an arm’s length with freight railroads. This includes joint use tracks and rights of way, as well as opportunities for shared corridors with separate track structure for freight and passenger service. The second is that the impact on present and future corridor capacity must be mitigated to ensure that rail freight capacity is not reduced, but enhanced. This recognizes that speed differences between passenger and freight trains and certain well-defined passenger service requirements must be taken into account. There must be a fair assignment of costs based on the ongoing cost of passenger services, including the cost of upgrading and maintaining track, signals and structures to support joint freight and passenger operations and the cost of maintaining and improving the safety and reliability of highway/railroad intersections in joint use corridors. Finally, all host railroads must be adequately and comprehensively protected through indemnification and insurance for all risks associated with passenger rail service on their lines and in their rights of way.
I’d now like to turn your attention to an issue that has become very important in the discussion about the passenger-freight interface: positive train control (PTC). Congress has placed a non-risk based, multi-billion-dollar mandate to install PTC on what effectively could be 90% of the freight rail network. This is driven by the requirement to implement this technology where passenger rail or shipments of certain hazardous materials utilize the network.
BNSF began developing this train control technology in 1984, which led us to the development of what we now call Electronic Train Management System (ETMS). However, it was never intended to be implemented on the scale envisioned by the mandate included in the rail safety bill enacted last year by Congress. The unprecedented cost – which we estimate could be in excess of $1 billion when fully implemented on BNSF in 2015 – is driven by factors mostly outside of our control, such as the presence of passenger trains and our statutory common carriage obligation to haul toxic chemicals. The cost will have to be fairly allocated between BNSF, its shippers and the public.
This mandate represents a tremendous financial burden not just on the freight railroads, but also on Amtrak and the commuter lines. If you have not yet heard about this issue from these constituencies, you soon will. They are partners in the cost of implementing this technology across jointly used lines. While the rail safety bill did authorize a relatively small technology grant program ($50 million per year for Fiscal Years 2009-13), no funding has yet been appropriated. I urge you to fully fund this program.
However, you should also ensure that other funding sources are available to the public passenger and private freight railroads to help defray the tremendous financial impact the mandate will have. For example, the intercity passenger and high speed rail programs at the Federal Railroad Administration received significant funding in the American Recovery and Reinvestment Act. The intercity passenger program has previously been tapped for safety technology investments like centralized traffic control and cab signal systems and makes sense as a funding source going forward, given the PTC mandate’s intense focus on passenger train operations.
In addition, the Department of Homeland Security’s rail security grant program was created by Congress with specific statutory language making train control, tracking and communications systems eligible for funding. The Transportation Security Administration’s long time focus on reducing security risks surrounding shipments of Toxic Inhalation Hazards fits squarely with the mandate’s inclusion of rail lines carrying these highly hazardous materials.
Finally, the freight railroads continue to support a rail infrastructure tax credit bill, sponsored by Congressman Kendrick Meek (D-FL) and Congressman Eric Cantor (R-VA) in the House. This bill provides a 25% tax credit and expensing for rail infrastructure expansion activities, of which PTC implementation is eligible. I believe this is a significant way that Congress can soften the impact this mandate will have on the railroads, in what is one of the most economically challenging times we’ve seen in decades.
In closing, my recommendations to you are two-fold:
1) Observe the principles for passenger/freight joint use of rail right of way that the Commission recognized, and be realistic about the kind of passenger service that can be achieved, given the limitations of joint use. Generally, those limitations are based on nothing less than the laws of physics and the consequences that flow from them.
2) Develop a realistic vision for passenger service that works for all stakeholders – including freight railroads and the nation’s shippers – and fully fund it.
It took $4 a gallon gas to show us that passenger train options are important to providing a fuel efficient alternative to the highway for millions of Americans. In addition, though, a comprehensive passenger rail program may shift a portion of the congested short-medium haul air traffic to rail, expand employment in the passenger rail industry and engender vibrant economic development around these networks. The choice to fund passenger rail over the next 20 years can have as significant an impact on this country as funding Air Traffic Control and runways have had in the last 20 years.
I appreciate the opportunity to present these views and I would be happy to answer any questions you have about passenger rail or freight rail policy.
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2) An inconvenient fact: When writing about high speed rail coming to the United States, many writers refer to high speed rail in Europe where "everyone rides the train, and high speed rail is very successful." Well, compared to Amtrak’s share of the domestic transportation market in the United States, which stands at less than one percent, yes, high speed rail in Europe does have a much larger market share. However, look at the real numbers. High speed rail in Europe does not have an overwhelming market share.
According to the Rio Grande Foundation, high speed rail works well for tourists traveling in Europe without the expense of renting an automobile, but it hasn’t done much to change European travel habits.
In 1980, intercity rail accounted for 8.2 percent of passenger travel in the 15 countries which made up the European Union as of 2000. But, by 2000, intercity rail declined to 6.3% of market share. Automobile driving gained almost exactly the same market share that rail lost in this time period, growing from 76.4% to 78.3%. Low cost European airlines have made the greatest challenge to high speed rail, thanks to Europe’s "open skies" policies, domestic air travel increased from 2.5% of travel in 1980 to 5.8% in 2000. Both intercity busses and urban transit both lost shares.
3) Thoughts from Ken Orski, Innovation NewsBriefs, Volume 20, Number 5.
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April 1, 2009
The Promise of High-Speed Rail
Is it wise to spend $13 billion of the taxpayers' dollars in the next five years ($8 billion in the recovery package and $5 billion in the next five annual appropriations) as a down payment on a high-speed rail network? Or are there better ways to spend this money on transportation? That was the subject of a recent weekly debate on the National Journal's Transportation Blog. The Blog's contributors include some 80 invited "Beltway Insiders," including members of Congress, governors, state and local transportation officials, senior executives of trade associations, environmentalists and respected transportation professionals. The debate revealed a spectrum of opinion among the contributors, with proponents of high-speed rail outnumbering the doubters by a wide margin.
SUPPORT FROM THE POLITICAL LEADERS
To launch the conversation, National Journal’s Lisa Caruso, who hosts the blog, asked Secretary of Transportation Ray LaHood what he thinks of President Obama’s decision to make high-speed passenger rail service a centerpiece of his transportation agenda.
"Do I believe in President Obama’s high-speed rail initiative? The short answer is ‘Yes, I do. Profoundly,’ the Secretary answered. It is a "transformational initiative," the Secretary went on, and the $13 billion in federal money is "a down payment that will jump-start what will be a world-class passenger rail system." The Federal Railroad Administration is finalizing a plan and related guidance for intercity passenger rail grants from the initial $8 billion in the economic recovery package, the Secretary announced.
Belief in the promise and potential of high-speed rail was also expressed by two congressional lawmakers who will be at the center of the legislative debate about the future of the nation's transportation program. "President Obama is on the right track, if I may use the term," wrote Rep. James Oberstar (D-MN), Chairman of the House Transportation and Infrastructure Committee. High-speed rail can provide "an efficient, convenient, comfortable alternative to driving or flying short or medium distances," he observed. Referring to the European and Japanese experience with high-speed rail (HSR), Oberstar noted "that success did not occur overnight." It took many years for the high-speed networks to mature and European countries continue to invest substantial amounts each year. There is no reason why we cannot do the same here in the United States, Oberstar contended. Rep. John Mica (R-FL), Ranking Member of the House T&I Committee echoed Mr. Oberstar’s sentiments, noting that he has been a long-time supporter of high-speed rail. A solicitation in the Amtrak reauthorization law, he wrote, produced over 110 expressions of interest, "an encouraging sign that there is tremendous interest in bringing high-speed rail to the United States." It won’t be right for every region of the country, and it will require a significant investment, Mica wrote, but it has to be part of our national transportation strategy. Gov. Tim Kaine of Virginia, was of the same opinion. Many communities have lost commercial air service over the last two decades, he observed, and high-speed rail can be an effective and affordable alternative for shorter commute routes. It already is in the Washington DC-to-New York corridor, he noted, and we need to create additional high-speed passenger rail corridors to support other major urban centers.
STATES’ SHOULD BE AN IMPORTANT PARTNER
Several contributors drew attention to the need to involve the states and to use the leverage of federal money to obtain funding commitments from state, local and private sources. Steve Heminger, Executive Director of (Bay Area) Metropolitan Transportation Commission cited the California HSR Authority’s plan as the kind of business model that needs to be replicated around the country if we are to be successful in building high-speed rail networks. The $35 billion Los Angeles-to-San Francisco project, he wrote, hopes to secure at least $15 billion in federal funds, $3 billion from local agencies and about $7 billion from the private sector in addition to a $10 billion state bond measure. In other words, the federal investment would leverage another 130 percent of funding from other, non-federal sources. "When it comes to high-speed rail, the federal response should focus on helping those states and regions that are willing to help themselves," Heminger concluded. Frank Busalacchi, Secretary of Wisconsin DOT was of the same opinion. California, the Cascades corridor, the Midwest corridor and North Carolina are some of the states already offering corridor services at their own expense, he noted. "Allocating the $8 billion to the state corridors will help expand passenger rail services where services are most needed," he wrote. "High-speed projects that require new rights-of-way would require a longer time frame."
Mortimer Downey, Senior Advisor at Parsons Brinckerhoff and head of the Obama transition team at U.S. DOT observed that what the Administration proposal has done is to bring the rail options to the intercity transportation table. But, he said, "the real proof of the merits of rail investment will come when hard decisions have to be made concerning specific corridor investment. It is those corridor decisions that will prove or disprove the merit of the high-speed rail case. And it will be up to the proponents of specific projects to show how effective high-speed rail is in bringing about desired results in terms of energy conservation, decrease in greenhouse-gas emissions, congestion reduction and other potential benefits.
NOTES OF CAUTION
Several contributors cautioned about raising unreasonably high expectations as to what the $13 billion in federal money can accomplish. There needs to be a reality check on what is practical, since there is no way an entirely new rail line can be built in the near future given the complex and lengthy environmental review and approval process, Rich Sarles, Executive Director, NJ Transit wrote. A similar opinion was expressed by Bob Poole, Director of Transportation Studies at the Reason Foundation. "The $8 billion in the stimulus bill has created expectations for Japanese-style bullet trains on 11 long-planned corridors, but those hopes are likely to go unrealized," he wrote. "True high speed rail (HSR) that goes 150-200 mph requires entirely separate rights of way with no grade crossings, shallow grades, very broad curves, and no 60 mph freight traffic. That’s what Japan, France, Spain, Germany, and Italy are doing, and the taxpayer cost is many billions per line...What the new federal funding will mostly be used for is upgrades to the existing shared passenger/freight tracks, aiming to get Amtrak trains up to speeds of 90 to 100 mph rather than today’s 60 or 70 mph."
Ken Orski, Editor/Publisher of Innovation NewsBriefs, also thought that much of the $13 billion in federal money is likely to end up supporting incremental improvements in existing rail infrastructure rather than building true high-speed lines in new alignments. But incremental improvements, he suggested, could involve not just upgrading existing signalization and roadbed but also adding extra track capacity in existing rail corridors, a move that would reduce interference between passenger and freight trains and benefit both freight and passenger rail service. In the same vein, Ed Hamberger, President of the Association of American Railroads, noted that passenger and freight improvements are not mutually exclusive goals. "America has the best freight railroad system in the world," he wrote, and " there is no reason why we can’t have the best passenger system as well."
Jack Schenendorf, former vice chairman of the congressionally-chartered National Surface Transportation Policy and Revenue Commission, urged to consider the high-speed rail initiative in the wider context of a national surface transportation strategy. "I applaud the fact that the President is making a down payment on high-speed rail but I am dismayed by the fact that he continues a pattern of underinvestment in the rest of our national surface transportation network," he wrote. We need to do much more than just increase investment in high-speed passenger rail, he continued. We also need to increase investment substantially in other modes of transportation. We need to adequately maintain our existing roads and bridges, upgrade our freight rail network, expand our transit systems and significantly increase highway capacity. "I respectfully urge the President to revise his budget to do for all the modes of transportation that he did for high-speed rail" Schenendorf concluded. Bill Graves, President of American Trucking Association also cautioned that we must not lose sight of the nation’s need to expand and repair the national highway system. Expanding passenger rail will not end traffic congestion, he wrote.
Greg Cohen, President of the American Highway Users Alliance, injected a note of skepticism. It is important that the Administration, rail advocates and critics answer some critical questions about the ultimate high-speed rail plan before investing hundreds of billions of taxpayer dollars, he wrote. "Where is the money coming from to fund the ultimate HSR plan?" he asked. Are there no good alternatives to HSR? He suggested that "intercity motor coach" transportation may offer a meaningful alternative and ought to be considered more closely.
Is the $13 billion high-speed rail program a game changing event that, in the words of Peter Gertler, Director of High-Speed Rail at HNTB Corporation, "will lay the foundation for the most significant national investment in public infrastructure since President Eisenhower’s vision to build a national interstate highway system"? Or will the money be frittered away on studies and modest improvements in existing rail service — improvements that may achieve marginal reductions in travel time but do not move us any closer to achieving a true national high-speed rail vision? Will the Administration resist the political temptation to spread the $13 billion among the six high-speed rail initiatives that are in various stages of planning in California, Texas, the Midwest, Florida, Nevada and North Carolina? Or should the Administration take the long view and focus its efforts and resources on one or two corridors that most clearly justify high-speed service (the Northeast Corridor comes to mind), knowing that such a strategy, like the interstate highway system, may take decades to realize over a number of presidential administrations. We should soon find out which road the Administration has chosen to follow.
For a full text of the discussion go to http://transportation.nationaljournal.com
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For a full view of all of Mr. Orski’s work, visit www.innobriefs.com
4) Amtrak, finally, after three and a half decades seems to be getting serious about the Sunset Limited. Word is coming the Sunset will become a daily train between Los Angeles and New Orleans. Still no word, however, about much needed service east of New Orleans. Amtrak still has not made a decision about this service; a congressionally mandated study is underway concerning restoring the Sunset Limited or a replacement service for it. We expect to hear about a completed study sometime soon. In the mean time, Amtrak is still sticking to its story that no one is interested in riding this train east of New Orleans even though a full 46% of the Sunset’s revenue used to originate east of New Orleans. Or, to put it another way, Amtrak still claims the dog ate its homework, as usual.
5) There is some good news. Amtrak has restored sleeping car service on the Lake Shore Limited between Boston and Albany, New York. This puts a missing sleeping car service back which has been gone for several years. Miraculously, Amtrak says it can make money from this on-again sleeping car. Wow; Amtrak has figured that out. Does that mean Amtrak also acknowledges what the rest of us have known for decades, that most sleeping car service on Amtrak everywhere else in the country makes money, too?
6) Just a quick note about Amtrak’s $1.3 billion in stimulus money. Amtrak has a plethora of documents on www.amtrak.com detailing how this money is being spent all over the country (That translates to how the money left over from not being spent on the Northeast Corridor is being divided up by the rest of the country.). Lots of good projects included in here, mostly for ADA compliance, and lots of new signage around the country which will help solidify Amtrak’s image. A lot of projects which have desperately needed to be done, such as the restoration and painting of the canopies over the train platforms at Tampa Union Station are included here. Most of this stuff would have never come out of Amtrak’s normal operating or free federal monies capital budgets, so it’s good to have the stimulus money to get these things done.
However, probably the most important expenditure of the money is for the restoration and rehabilitation of out-of-service passenger cars.
On Amtrak’s web site, we are told there are 1,519 passenger cars owned by Amtrak, plus 469 locomotives, 80 Auto Train vehicle carriers and 101 baggage cars. Amtrak operated state-owned equipment includes 136 railroad passenger cars and 20 locomotives.
So, if Amtrak says it owns 1,519 passenger cars, less the 1,346 cars it says it has on its active daily roster, then there are 173 pieces of equipment sitting around in the weeds somewhere on a wreck line. In the stimulus package, Amtrak says it will return 21 long distance cars from wreck status to operating status, and a mixture of 60 Amfleet low-level cars (a very few long distance cars, but the vast majority are NEC cars) back to service. This totals 81 cars, which still leaves 92 cars sitting in the weeds. Yes, some of those cars are most likely beyond repair, but not all 92 of them.
When will we see these other cars returned to service? How much of a priority will this be for Amtrak?
Of the current 1,346 active cars on the daily roster, there is a daily requirement of 1,072 cars for use (Yes, trainlines and consists have been cut that much.). In late February, there were 1,120 cars ready for service, which is a good improvement for Amtrak. That leaves 274 cars (a high percentage) either as spares, or in the shops being worked on.
So, let us say Amtrak is improving its shop performance, and will have a lower amount of cars in the back shop at any one time, and more cars available for service, plus the new Viewliner series sleepers, diners, and baggage cars it is ordering.
What could be done with all of this equipment, right now?
Well, the Sunset could easily go daily between Los Angeles and New Orleans, as could the Cardinal between New York and Chicago.
Either the Pioneer, Desert Wind, or North Coast Limited between Chicago and the West Coast could be restored (Only one, not all three.).
Some type of short daily train between New Orleans and Florida could be added to replace the east end of the Sunset Limited, and this train could include a full consist of cars, including sleepers. Other consists could be beefed back up.
All it takes is for Amtrak management to have the will to do this.
Remember, with the current inventory of cars (prior to lots of wrecks, thus the requirement for some of this equipment to be rebuilt), all of the existing Amtrak network was operated, plus the Desert Wind, Pioneer, and Sunset Limited east of New Orleans, and most trains had longer consists.
It’s not about the money. It’s about Amtrak management wanting to be clever enough and work hard enough to make this happen, and the Amtrak Board of Directors to be asking questions as to why this isn’t happening.


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