From what I've been able to glean from the different news medias, talk radio and even here. I can see nothing good becoming of this bill. Yes it will lower pollutants by reducing consumption by force, but at what cost.
From what I can see the working poor and those on fixed incomes will be hit the hardest with costs. How will they survive????
Our national debit is already is in the trillions. How many trillion will the cost for this be in the long run????
The RR's will survive in a much different form, but it'll take government funding to make up from the losses in the long run. What will the public cost be for this????
Our country is acuminating debit at rate, which it can ill afford at this time and are quickly becoming the land of indentured servants owned by other countries.
As I said there can be no over all good come of this plan as I see it.
http://www.trainboard.com/railimages/showgallery.php/cat/500/ppuser/4309
Meanwhile, back on the RR....
garr Coal will be the proverbial frog in the warming cooking pot. At first the railroads won't notice the effects but over time that stalwart of income will be reduced significantly. What will replace it?
Coal will be the proverbial frog in the warming cooking pot. At first the railroads won't notice the effects but over time that stalwart of income will be reduced significantly. What will replace it?
Intermodal! Lots and lots of it. If they do the carbon cap and trade, it will chase trucks off the road in huge numbers.
How about RRs being in a position to sell credits gained from intermodal to their coal consuming customers?
Sure, coal will be a declining business, but it's very managable and more than replaceable.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
oltmannd Meanwhile, back on the RR.... garr Coal will be the proverbial frog in the warming cooking pot. At first the railroads won't notice the effects but over time that stalwart of income will be reduced significantly. What will replace it? Intermodal! Lots and lots of it. If they do the carbon cap and trade, it will chase trucks off the road in huge numbers. How about RRs being in a position to sell credits gained from intermodal to their coal consuming customers? Sure, coal will be a declining business, but it's very managable and more than replaceable.
Now this is interesting, the statement that "coal will be a declining business, but it's very managable and more than replaceable". Coal contributed almost 25% of BNSF revenues in 2008.
I have managed multiple businesses. If 25% of my revenue left, I would manage it by reducing my labor force and capital investment drastically. Anything is manageable, but that doesn't mean it is not tremendously destructive to the business.
What do you propose the railroads "easily replace" this lost business with? Intermodal, from the increasing amount of imported goods due to the manufacturers being driven overseas by draconian and unilateral cap and trade policies? Who is going to buy all this stuff the railroads will supposedly be hauling after their disposable income is effectively reduced by 10% due to the taxes and increased prices resulting from cap and trade? Is it the people who will be newly unemployed, like those who USED to operate the declining coal business of the railroads, or the truckers who the railroads are replacing? Remember, it should take less people to haul the freight by rail.
Everyone needs to think about what the ramifications of cap and trade will be. There is no free lunch. The increased costs will be paid,ultimately, by consumers. Cap and trade is a fundamental restructuring of the US economy and our lifestyles. Whether you agree it is needed or not, if you are not willing to admit this fact, you are denying reality.
The effect on railroading will be the same as the effect on the rest of the economy which railroading depends on-it will lead to no economic growth, higher unemployment, and a long term decline in our standard of living. There is no upside.
Visit look4trains.com
oltmannd How about RRs being in a position to sell credits gained from intermodal to their coal consuming customers?
Who even knows if the railroads will be generators or users of credits?
I easily can envision the regulations surrounding carbon credits quickly becoming quite a bit like the Internal Revenue Code; chock full of special provisions meant to award -- or perhaps punish -- specific industries. I might even predict the "green" jobs that are generated will be dwarfed by the lobbyist and lawyer jobs created.
The railroads would be well advised to continue ad campaigns similiar to the recent ones of NS featuring their fuel use advantage over trucks.
Been gone for a couple of days. This has been a very good discussion.
The way I see things right now is that we are at a major junction (crossroads) in our economic structure. We are addressing in a very quick manner, while there is a super majority in the Senate, major issues which will move our economy as never before.
Go back and listen to the Candidate's comments on January 8, 2008. You dont even have to listen carefully. It is stated very clearly. Electric rates will "necessarily skyrocket".
C&T is the crossroads we have never faced before. Economically, we had better get it right.
ed
htgguy Now this is interesting, the statement that "coal will be a declining business, but it's very managable and more than replaceable". Coal contributed almost 25% of BNSF revenues in 2008. I have managed multiple businesses. If 25% of my revenue left, I would manage it by reducing my labor force and capital investment drastically. Anything is manageable, but that doesn't mean it is not tremendously destructive to the business.
Because will take decades for the coal traffic to dry up.
Because the growth of base load traffic other than coal is still 1-2% a year. (population growth alone increases the size of the economy)
Because, carbon tax or not, intermodal growth will swamp everything else in the next few of decades.
Because RRs don't particularly care either way if a carbon tax becomes law.
Because a carbon tax is peanuts compare to labor cost differential in driving business off-shore.
Because managing a declining business (coal traffic, not all RR traffic) means that capital is freed up for other purposes - like building intermodal terminals and ROW improvments.
The unilateral clean air and clean water acts of the late 60s and early 70s didn't send us to permanent economic ruin. Those were really pretty heavy regulation (that largely worked!). This is at least market based. Is this really any worse?
It really just doesn't matter much to railroads. RRs are in a good spot these days. If rereg can be kept down to a dull roar, RRs will grow.
oltmannd htgguy Now this is interesting, the statement that "coal will be a declining business, but it's very managable and more than replaceable". Coal contributed almost 25% of BNSF revenues in 2008. I have managed multiple businesses. If 25% of my revenue left, I would manage it by reducing my labor force and capital investment drastically. Anything is manageable, but that doesn't mean it is not tremendously destructive to the business. Because will take decades for the coal traffic to dry up. Because the growth of base load traffic other than coal is still 1-2% a year. (population growth alone increases the size of the economy) Because, carbon tax or not, intermodal growth will swamp everything else in the next few of decades. Because RRs don't particularly care either way if a carbon tax becomes law. Because a carbon tax is peanuts compare to labor cost differential in driving business off-shore. Because managing a declining business (coal traffic, not all RR traffic) means that capital is freed up for other purposes - like building intermodal terminals and ROW improvments. The unilateral clean air and clean water acts of the late 60s and early 70s didn't send us to permanent economic ruin. Those were really pretty heavy regulation (that largely worked!). This is at least market based. Is this really any worse? It really just doesn't matter much to railroads. RRs are in a good spot these days. If rereg can be kept down to a dull roar, RRs will grow.
What I see as the flaw in your reasoning is the assumption that cap and trade will have no effect on the growth of the economy and intermodal service. I disagree. As others in this thread have pointed out, the goal of cap and trade is "sustainability". A sustainable economy is a slower growing (or stagnant, or contracting) economy.
Cap and trade is not the market at work-it is a government mandate that CO2 emissions be cut by a huge amount. The imposition of this cap and trade scheme is the most drastic government intervention in the economy in the history of our nation, much further reaching that the environmental mandates of 40 years ago. The government will pick winners and losers, a process that has already started in congress. The only "market" here is how much it will cost to buy favor from elected officials.
You chose not to address my points regarding who will be buying all the goods shipped by rail, and why a huge tax increase on every segment of the economy won't affect economic activity and in turn the business of railroading. That is crucial to my point that cap and trade will hurt railroads. Rail traffic levels in 2009 provide a glimpse at how economic activity affects railroads-why won't a huge tax increase on the entire economy (which is what cap and trade is) provide more of the same? Railroads will grow only if the economy grows, and cap and trade is nothing if not a huge anchor on economic growth.
Last, if global warming is really as big a problem as some maintain, why will it take decades for coal traffic to dry up? If this was really about global warming, or climate change, the bill would be directed toward actually accomplishing a quicker reduction in CO2, and a shift to nuclear power. But the real intent of cap and trade is to make the federal government more powerful and steal choices away from the average person.
All I hear is that railroads will loose coal traffic. And the only thing they could gain is intermodal. Where is the great marketing initiative, a term thrown around over the past decades as being the panacea for American businesses, the golden diploma carried forth by community college graduates hell bent on changing the world's economy! (Yeah, I am sarcastic.) Besides new products and transportation needs coming along in time, there is one other flagrantly apparent traffic yet unmined by today's managements: passenger! Could rail's future actually be in moving people rather than freight; or in addition to freight. This forum has out of hand dismissed such a future for railroads.
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
One thing to keep in mind is that the point (ostensibly) of cap and trade is to reduce the emission of CO2, rather than to generate revenue by a tax. The tax is really just a penalty for violating the CO2 emission limit set by congress. So, in theory, we won’t be paying more, but rather, we will be consuming less in order to lower our contribution of CO2 emissions. The threat of higher cost is the stick of the classic carrot and stick motivator. The carrot is the planet being saved from ruin.
The simplest execution of the cap and trade objective would be to just set the CO2 limits and prosecute any violators, like a speed limit on the highway. Set the limits high and gradually reduce them over a period of years, so all CO2 emitters could adjust their output downward at a manageable rate. At the same time, the American people could adjust their lifestyle by reducing their heating and cooling, driving less, and modifying their diet. This simple execution of the cap and trade objective would just be called, cap.
But cap and trade, as it is being advanced, is more complex than the simple execution of cap. First it focuses on the entire quantity of atmospheric CO2, and how much that quantity needs to be reduced. Then it divides up the responsibility of reducing it equally. So producing CO2 then becomes a fundamental human right, which is equally apportioned. Some recipients of that right are producing less than what they are allowed, and some are producing more than what they are allowed. If those exceeders cannot reduce to what they are allowed, they have the option of purchasing the unused portion of the right to produce CO2 from those who are producing less than what they are allowed. That is the trade of cap and trade. It is the purchase of those excess CO2 rights (carbon credits) that adds cost to the big carbon emitters such as coal fired power plants, agriculture, and transportation. The cost of the purchase is the what is being called the tax.
So the bill endows a gift to the low CO2 emitters in the form of excess emission allowance, which they can sell as if it were currency. It raises a question of how those beneficiary businesses will be defined. Businesses normally exist or don’t exist on the basis of whether or not they produce something for which there is a market, and are able to meet the market price. Will it be possible to start a new low-capital business that happens to have a very low carbon footprint, but is really just a “front” business for the purpose of harvesting the lucrative carbon credits? Could I officially start the low carbon GREEN VISIONS COMPANY, and receive a federal allotment of carbon credits, which I could sell to the power company for big bucks?
Considering this and other complications, there will have to be a mighty complex set of regulations developed to administer and manage all of these carbon credits and to determine how many are given free to businesses as their rightful allotment. It seems like it would require something at least as complex as the IRS code right at the outset. How much will businesses have to pay for experts just to manage their compliance with this new set of regulations? How much will the trading companies charge for managing the trades? How much will the government charge for administering its end of the regulations?
The original thread question was "what will be the effect of the Energy Bill and railways." Don and others with expertise have answered, "nothing special." If someone with expertise in railways wants to say otherwise, then I'm pleased to engage that discussion.
Do a word search for "rail" in half the posts in this thread and it doesn't even appear! Or is at best just tacked on. Sure doesn't seem to be much interest in railways any more.
RWM
Railway ManDon is as well-informed about the traffic potential of railways as anyone I know. The original thread question was "what will be the effect of the Energy Bill and railways." Don and others with expertise have answered, "nothing special." If someone with expertise in railways wants to say otherwise, then I'm pleased to engage that discussion. Do a word search for "rail" in half the posts in this thread and it doesn't even appear! Or is at best just tacked on. Sure doesn't seem to be much interest in railways any more. RWM
Thanks, I guess we are done then, since the experts have spoken.
I appreciate everyone’s contribution to this thread, no matter what their viewpoint is. However, I don’t know how anyone could answer the question implied in the thread title without being an expert on both railroads, and the energy bill. Both are a part of the subject. I know a little about both, but even if I knew everything about railroads, I would not even attempt to say specifically how the energy bill would affect railroads in dollars, given what I don't know about the energy bill. All I can do is give my view and reasoning.
Railways employ staff and consultants whose job is to provide expertise on matters such as the Energy Bill and its potential affects on railways. The Energy Bill as well as other proposed or enacted Congressional policy and Obama Administration policy is summarized into policy effects papers that are distributed for reading and discussed in policy meetings.
Railway Man Railways employ staff and consultants whose job is to provide expertise on matters such as the Energy Bill and its potential affects on railways. The Energy Bill as well as other proposed or enacted Congressional policy and Obama Administration policy is summarized into policy effects papers that are distributed for reading and discussed in policy meetings. RWM
Well in my opinion, the bill is being officially represented to be something quite different than what it really is, and a lot of people agree with me. We may be right or wrong, but if we are right, the experts who are hired by railroads to explain the bill may be giving them the wrong information.
BucyrusWell in my opinion, the bill is being officially represented to be something quite different than what it really is, and a lot of people agree with me. We may be right or wrong, but if we are right, the experts who are hired by railroads to explain the bill may be giving them the wrong information.
Could be, though to me it seems fairly straightforward.
There's risk in everything railways do. The "we" who are supposed to have these and similar answers for railway senior management try to mitigate our risk (because we really don't want to be fired) by spending a lot of time in D.C. talking to members of Congress, senior legislative staff, and senior administration officials, to seek clarification about the proposed rules, schedules, and effects. I'm reasonably confident that railways aren't assessing it wrong.
With all the criticism of the climate bill, I think it is only fair to characterize the opposite position. Here is a comprehensive analysis of the climate bill that echoes the rhetoric of the sponsors. If what they say is true, we will all be winners. No reason to worry about an adverse impact on anything. The article implies that the only ones objecting to the climate bill are oil companies and other fossil fuel interests, and because of the bias of their business agenda, their objections are unfounded.
http://www.casavaria.com/cafesentido/2009/07/02/3382/climate-bill-could-allow-industry-innovators-to-bring-total-energy-revolution/
Railway Man Bucyrus Well in my opinion, the bill is being officially represented to be something quite different than what it really is, and a lot of people agree with me. We may be right or wrong, but if we are right, the experts who are hired by railroads to explain the bill may be giving them the wrong information. Could be, though to me it seems fairly straightforward. There's risk in everything railways do. The "we" who are supposed to have these and similar answers for railway senior management try to mitigate our risk (because we really don't want to be fired) by spending a lot of time in D.C. talking to members of Congress, senior legislative staff, and senior administration officials, to seek clarification about the proposed rules, schedules, and effects. I'm reasonably confident that railways aren't assessing it wrong. RWM
Bucyrus Well in my opinion, the bill is being officially represented to be something quite different than what it really is, and a lot of people agree with me. We may be right or wrong, but if we are right, the experts who are hired by railroads to explain the bill may be giving them the wrong information.
I'm curious how you can even assess the impact of a bill that is more than 1000 pages long and wasn't available in its final form at the time the House voted on it.
It's understandable that politically, a railroad can't come out and say "We think this bill will be an anchor on the economy and detrimental to our business."
Railway Man, have you read the whole bill, and briefed anyone on the likely effects on the economics of rail transport? I'm not trying to be argumentative, just curious. I haven't read it-just a few selected portions. I expect it is hugely complex and will have effects that are very hard to predict now, along with the fact that there are a lot of unknowns in the world that will change outcomes as well.
I still see the greatest impact on railroads as how the overall economy will be affected.
EVER HEAR THE ONE IM HERE FROM THE GOVT TO HELP YOU. CAP & TRADE & THE ENERGY BILL IS A DISASTER. WE HAVE PLENTY OF COAL GAS & OIL USE IT .
HERBYD
HERBYD EVER HEAR THE ONE IM HERE FROM THE GOVT TO HELP YOU. CAP & TRADE & THE ENERGY BILL IS A DISASTER. WE HAVE PLENTY OF COAL GAS & OIL USE IT . HERBYD
UNTIL ITS ALL GONE OR WE CHOKE TO DEATH!
henry6 HERBYD EVER HEAR THE ONE IM HERE FROM THE GOVT TO HELP YOU. CAP & TRADE & THE ENERGY BILL IS A DISASTER. WE HAVE PLENTY OF COAL GAS & OIL USE IT . HERBYD UNTIL ITS ALL GONE OR WE CHOKE TO DEATH!
What would cause us to choke to death? The issue of cap and trade has nothing to do with toxic emissions.
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