Warren Buffett Gambles on Trains

The biggest railroad news in a while occurred yesterday when it was announced that Warren Buffett and Berkshire Hathaway were purchasing BNSF (Burlington Northern Santa Fe).  Buffett agreed to purchase the 77.4% of the company that he did not already own for $26 billion.

BNSF, which is a relatively new railroad as an entity, is actually a combination of many older railroads including the Burlington Northern and the Santa Fe.  The railroad covers 32,000 miles of track, 6,700 locomotives and 220,000 freight cars.  The company’s biggest clients are coal and agricultural product shippers.

That begs the question of why Buffett made the investment.  Is he betting on trains, coal, industrial agriculture, or all of the above?  Streetsblog’s Elana Schor takes a swing at that question:

That environmental rationale for Buffett’s deal struck some in Washington as dubious. Frank O’Donnell, president of the green group Clean Air Watch, wrote on his website that the BNSF deal was “the biggest climate story of the day,” bigger even than the political maneuverings of the Senate environment committee:

This is a $34 billion dollar bet that coal will remain the centerpiece of American energy policy in the future. Buffett clearly believes that coal use will remain strong – and possibly grow. So he is putting his money on a vision of America with no effective climate policy at all – or at least one that doesn’t slow coal growth.

BNSF’s reliance on coal is indisputable; the black stuff has accounted for nearly half of its tonnage this year, and MarketWatch estimates that 10 percent of U.S. electricity comes from coal hauled by the railroad.

As coal-hauling railroads go, however, BNSF has made an attempt to distinguish itself on the energy efficiency end. The railroad is developing an emissions-free hydrogen-powered locomotive, and in May started to test-run a group of GE locomotives that cuts emissions by 40 percent over previous, dirtier models.

My take (and part of Elana’s) is this purchase is a good thing.  I personally don’t care if Buffett is invested in coal – because it is admittedly not going anywhere any time soon – because Buffett will be invested in transportation and rail infrastructure.  He will be invested in making the rail infrastructure solid, having working trains and hopefully growing the network.

Passenger transportation gets the most news coverage, but freight transportation is equally important.  The effect of truck freight transportation on roads and the environment is well documented.  Moving more of our freight to rails is good for everyone, including driver safety and those living close to highways.

Moreover, maintaining high quality rail corridors is also good for passenger rail as Amtrak and many public transit commuter rail systems already run on freight-owned rails.  Expanding networks is good for the future of commuter and inter-city rail too.

Good for Buffett in seeing that America’s transportation future lies on the tracks, not on its asphalt roads.

 

Women in Transportation

My partner alerted me to this fascinating 1943 historical abstract from Transportation Magazine.  The 1943 article was aimed at male supervisors who suddenly had to deal with female employees (presumably because the men were off fighting a war).  The article was terribly frightening.  Feministing highlighted some of the more insulting suggestions:

1. Pick young married women. They usually have more of a sense of responsibility than their unmarried sisters, they’re less likely to be flirtatious, they need the work or they wouldn’t be doing it, they still have the pep and interest to work hard and to deal with the public efficiently.

2. When you have to use older women, try to get ones who have worked outside the home at some time in their lives. Older women who have never contacted the public have a hard time adapting themselves and are inclined to be cantankerous and fussy. It’s always well to impress upon older women the importance of friendliness and courtesy.

8. Give every girl an adequate number of rest periods during the day. You have to make some allowances for feminine psychology. A girl has more confidence and is more efficient if she can keep her hair tidied, apply fresh lipstick and wash her hands several times a day.

9. Be tactful when issuing instructions or in making criticisms. Women are often sensitive; they can’t shrug off harsh words the way men do. Never ridicule a woman – it breaks her spirit and cuts off her efficiency.

Yikes! We as a society and transportation organizations have come a long way since 1943.  Now women are an expected part of the workforce and reasonably so.  Moreover, transportation is a phenomenal field for all people as many of the driver and maintenance jobs require few skills before hiring.  Public transportation agencies, much like police officer positions, are seen as an ability for the lower and lower middle class to find positions that are secure and pay well; hence their attractiveness to men and women, people of all ethnicities, sexualities and nations of origin.

I would imagine that like many blue collar positions and jobs of manual labor railyards can be rough and tumble places.  However, I hope that many more women enter the workforce and articles in transportation magazines speak about creating feminist workplaces and places that are welcoming and embracing of diversity of all sorts.

 

Relying on Rail Trainsit to Decrease Water Runoff

For a class I am taking I read the National Resource Defense Council report on Stormwater Strategies: Community Responses to Pollution Runoff.  In that report I happily stumbled upon the following paragraphs (emphasis mine):

Transport imperviousness generally exceeds rooftop imperviousness in urban areas of the United States.⁵ “Cumulative figures show that, worldwide, at least one third of all developed urban land is devoted to roads, parking lots, and other motor vehicle infrastructure. In the urban United States, the automobile consumes close to half the land area of cities; in Los Angeles the figure approaches two thirds.”⁶ The city of Olympia, Washington, also found that transport imperviousness constituted approximately two-thirds of total imperviousness in several residential and commercial areas.⁷ This distinction is important because rainfall on transportation surfaces drains directly to a stream or stormwater collection system that discharges to a waterbody usually without treatment, whereas some roofs drain into seepage pits or other infiltration devices. Research has also found a strong relationship between curb density and overall imperviousness in residential areas suggesting that roads lead to the creation of other impervious surfaces.⁸

The creation of additional impervious cover also reduces vegetation, which magnifies the effect of the reduced infiltration. Trees, shrubs, meadows, and wetlands, like most soil, intercept and store significant amounts of precipitation. Vegetation is also important in reducing the erosional forces of rain and runoff. In one study, conversion of forest to impervious cover resulted in an estimated 29 percent increase in runoff during a peak storm event.⁹

Urban life will always have impervious surfaces, it’s the nature of human settlement.  We cannot possibly achieve runoff totals that mimic life before urban development.  However, that does not mean we cannot plan for the future or current establishments to cut back on the total amount of roads, parking lots, driveways, garages and other automobile related structures.  While railroad tracks exist on firmly packed land and are therefore impervious as well, they also are not the same as asphalt in terms of the type of imperviousness.  Moreover, light rail can exist in green spaces, as in the above picture.

However, the most important part of rail technology is it takes up less space than roads.  The number of people that can travel on a skinny railroad track can mimic the number of people on a busy multi-lane highway.  As I always say, roads are not about to and nor should they disappear.  However, decreasing the number of roads and other auto-dependent land uses would be a boon to the environment.

Runoff is a danger for a number of reason: for the pollutants it carries, for the erosion that occurs, for the way it prevents water from getting back to aquifiers, ground water, and other elements of the watershed.  Decreasing our impervious surface area by relying on rail more and our roads less would be a boon to our cities not just for ecological and economic reasons, but also because it would open up more space for the city to either grow in density or for public space to be available to be used.  Imagine your busy roads now being parks instead!

 

Railroad Width = Two Horses’ Asses: Truth or Fiction

A good friend of mine emailed me a story of the history of railroad track widths.  The gist of the story (which in full can be read here) is that the standard American Rail gauge (the 4′ 8.5″ between the tracks) can be traced back to the width of two horses’ asses.  The tale goes that the railroad track widths were first based on standard wagon cart widths, which date back to Roman military cart widths (especially in England), which were determined by the width of two average Roman horses to pull such wagons.  After some online snooping I wanted to see if there was any validity to this legend.  While the legend has some truth to it, it’s quite a bit exaggerated.

One rumor-busting website answered the question of the history of rail gauges with the following passage:

Carts on rails had been used in mines in England for years, but the width of the rails varied from mine to mine since they didn’t share tracks. Stephenson was the one who started experimenting with putting a steam engine on the carts so there would be propulsion to pull them along. He had worked with several mines with differing gauges and simply chose to make the rails for his project 4-foot, eight inches wide. He later decided that adding another six inches made things easier. He was later consulted for constructing some rails along a roadway and by the time broader plans for railroads in Great Britain were proposed, there were already 1200 miles of his rails so the “Stephenson gauge” became the standard.

Interestingly, the 4-foot, eight-and-a-half inch width has not always been the standard in the U.S. According to the Encyclopedia of American Business History and Biography, at the beginning of the Civil War, there were more than 20 different gauges ranging from 3 to 6 feet, although the 4-foot, eight-and-a-half inch was the most widely used. During the war, any supplies transported by rail had to be transferred by hand whenever a car on one gauge encountered track of another gauge and more than 4,000 miles of new track was laid during the war to standardize the process. Later, Congress decreed that the 4-foot, eight-and-a-half inch standard would be used for transcontinental railway.

It will also be noted that rail gauges are not uniform within the old Roman Empire, giving less thrust to this theory.  Therefore, carts that the Romans used may have very well set some standards that affected transportation for much of Western history, but they are not the sole reason that railroad tracks in the US and England are the way they are.

 

Economix Blog Rebuttal – Part 3

Forgive me, but I am beginning to lose my temper with Edward Glaeser and his discussion of high speed rail’s benefits in the United States in the Economix blog on the New York Times website.  His work seems intellectually dishonest, at best, as he seems to be out to support a conclusion, not make a real finding of fact.  This starts with his desire to use a Dallas-Houston link as his example, again.  He justifies this decision by arguing at least he isn’t discussing the proposed link between Oklahoma City and Dallas.  Honestly, how many times in the national high speed rail discussions does Oklahoma City come up?  We tend to focus on California, the Chicago area and the Northeast Corridor.

Here is my itemized discussion of the points I find most troubling:

– Dallas currently has 1.3 million people and the metropolitan area has 6.3 million residents.  Houston is home to 2.2 million people and the metropolitan area has 5.7 million people.  Given the geographic locations of the cities, birth rates, and the nature of their economies it is relatively certain to say these cities are going to continue to grow for the foreseeable future.   Glaeser misses the point in discussing the cost of new infrastructure.  These two cities are going to need to build infrastructure anyway, whether it is new roads and airports, or just keeping up the constantly-worn roads they already have.  Glaeser in no way addresses whether it is better to build new railroads or new highways, rather he just compares new rails to existing roads.  He likewise fails to mention that high speed rail may spawn more railroads in the area whereas more highway will spawn more roads.

– It is almost criminally negligent to not point out that energy prices are not stable.  If trains are in fact more efficient that is a very big deal, as energy prices are sure to rise as oil prices inevitably rise again.  Moreover, planes are fossil fuel dependent.  And, while cars in theory could run on energy sources other than fossil fuels, they largely do not right now, especially in Houston and Dallas.  That said, trains have the clear advantage of being electronically powered, which means they can run on any resource that powers the grid, including wind, water, solar and other renewable resources.  This makes trains far more green than planes, and automobiles at the moment.

– This is a bone more with economics than with Glaeser in particular, but is it possible to really measure environmental damage only in dollars and cents?  Is the value of a good environment really reduced to counting bills with Andrew Jackson on the face?  Any effort that can help reduce negative environmental effects should be valuable and while efficiency is important, if it is not inefficient it should not trivialized either.  Lots of little changes equal a larger change.

– Lastly, Glaeser ignores any value of work done on trains.  People largely do not do work in cars, and work on planes is challenging.  However, trains with their leg room, cafe cars, and access to wireless networks can be great places to work, even with your peers!  Of course it’s usually easier to get from downtown to the train than the plane, so work can go on longer in the office too.

– Given that Glaeser said he will address land use issues in his next post, I will resist the desire to pillory him on how people get to train stations and airports and the nature of sprawl.

I am really disappointed in these posts.  I am not quite sure who Glaeser think his audience is, but the quality of his intellectual output in these blog posts is insulting to his readers.

 

True Costs of Roads

In my last post, rebutting Edward Glaeser, I mentioned the hidden costs of roads that he was not accounting for and the fundamental problem with assuming that any means of transportation has to be profitable in itself. Stephen B. Goddard does an admirable job of listing several of the costs we forget about that are assumed in driving in his book Getting There: The Epic Struggle between Road and Rail in The American Century.

patrol highways

clean polluted air

insure that foreign oil flows freely to U.S. shores

subsidize downtown park for millions of commuters

dispose of millions of junked cars, tires, and batteries

cover higher health-care costs associated with the breathing of gasoline fumes

deal with fuel wastage and time lost in traffic jams

cope with losses of life and human capacity in traffic accidents

pay courts and judges to handle personal injury lawsuits

pay auto insurance premiums.

Each of these bullet points deserves its own blog post.  My general point is that no amount of taxes on cars or gasoline covers all of these costs to the country and the American consumer.  Rail is not perfect and roads cannot be done away with.  However, communities that depend more on rail for more of their traveling needs will also lower many other costs including auto insurance, health-care costs, patrol costs (including state police and ambulance duties), the pace of car and car part disposal, and the epic loss of life at the hands of highways.

The most dramatic of these costs for me is the human cost. 37,261 people died in vehicle accidents in 2008 and 41,259 in 2007.  To put that in perspective, 58,228 American servicemen died in the Vietnam War.

Roads cannot and should not be demolished, but rails (high speed or not) are necessary to alleviate many of the costs, environmental and beyond that our country currently subsidizes by depending so heavily on our cars.