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Fast Track To Public Rail Electrification

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A couple things have occurred to me since reading the recent Trains article on electrification. Rail electrification for the traditional purpose may never happen, but there is a new purpose for rail electrification that may compel it to happen very soon.  That new purpose is a non-oil, non-carbon, national transportation system for the U.S. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p> Near universal electrification has always been the road that might have been taken, but never was. Maybe when EMD toured their demonstrator #103, they doomed electrification as well as steam, even though electrification had not arrived yet, at least not as a widespread standard.   <o:p></o:p> Ever since, there has been an on-going reevaluation of the economics of electrification.  As technology changes, and oil prices rise, electrification hovers on the edge of economic feasibility as the replacement for diesel electric locomotives.  However, there is the perpetual trade off between the lower operating cost of electrification, and its major capital investment.  The problem, however, is not so much in the financial comparison of the money in that trade-off as it is in the uncertainty of the future, which must be relied upon to generate the business necessary to pay back the investment. <o:p></o:p> The price of oil is bound to keep rising as its demand rises in the developing world and its supply diminishes.  Therefore, if it were not for the uncertainty of future business cycles, we could just stand by and wait for the price of oil to reach the tipping point where it would justify converting from diesel-electric to straight electric.  In those terms, it would be inevitable.  However, the uncertainty of the future business cycles might never favor electrification, no matter how high the price of oil rises.   <o:p></o:p> Some say the best days of U.S. industrialism are over, that we are entering a period of decline, and our title of world industrial dominance will be taken over by China within twenty years or less.    For now at least, the U.S. economy, including its rate of consumption and standard of living, is shrinking.  It may turn out that this current recession becomes the economic status quo with unemployment hovering around 10-15% indefinitely.  Thus, the investment risk of electrification may stay just one step ahead of the tipping point of rising oil prices during the entire future of the U.S.  So, based on the usual economic criteria that would trigger electrification, it may simply never happen. <o:p></o:p> However, what is emerging today is a fast track agenda for near universal electrification that does need the proper economic business incentives to materialize.  This is because the purpose of this electrification is different than any purpose considered in the past, and unlike previous objectives, there is no price for electrification for this new purpose that is too high. Electrification for this new purpose will not be done by a consensus of individual railroad companies deciding that the time is right economically, as was the case with dieselization.  Instead, this will be national project that railroad companies will simply agree to be a part of.    <o:p></o:p> This is truly something different, and I am convinced that it will lead to universal electrification commencing very soon, and perhaps completed within ten years.  The only thing that could derail this plan is if current poor economic conditions deteriorate so fast and far that the nation cannot come up with the money.  Otherwise it will happen because it must happen.  Our very survival depends on it.  And most importantly, the call for U.S. electrification is for it to be a national investment as a component of a new National Energy Policy, which is currently being developed.  The rationale for this massive endeavor is well detailed in many readily available Internet publications, which mirror the article in Trains by Scott Lothes, entitled, WIRED UP.     <o:p></o:p> There are two main objectives that raise this issue to the level of requiring nationalization, and both are related to a supposed crisis.  One objective is to insure against the economic shock of our transportation system suddenly being brought to a halt because of a disruption of oil supplies.  The other is to prevent catastrophic climate change.  There are other reasons to electrify such as improved efficiency, reduced highway accidents, and less asthma, but they do not justify government financing with taxpayer money.  It is the two-prong crisis of oil supply and carbon footprint that calls for the federal solution. <o:p></o:p> Furthermore, the total scope of the federal solution to this crisis goes beyond the electrification of rail.  It also includes shifting the majority of truck haulage off of the highways and onto the rails.  Likewise, it calls for HSR to be introduced in conjunction with universal electrification to shift the majority of automobile traffic off of the highways.  And it goes on to include massive new rail line improvements, new routes, elimination of grade crossings, ECP brakes, PTC, and new terminal facilities to mesh with the increase in the long haul traffic previously handled by trucks.         <o:p></o:p> Not only does the new purpose for electrification override the concern about the investment risk and payback that has prevailed in the past, but it also might actually result in a higher cost of electric operation compared to what that cost would be under the traditional electrification business analyses of the past.  That is because electrification for the new purpose prefers wind energy, whereas past plans would have used electricity from coal, nuclear, or hydro, and not considered wind energy as being economically viable.  So, this new plan for electrified transportation requires new wind farms, and a new electrical distribution grid to serve those wind farms and handle the new intricacies of the variable output generation that results from wind.  This unique grid objective melds with the attributes of the so-called smart grid under consideration as a major infrastructure improvement. <o:p></o:p> For the abovementioned conclusion, I make a starting point assumption that electricity produced by wind is more costly than electricity produced by coal, however, I have no proof, and would welcome any input on the subject.  It is such a polarizing question that one cannot find the answer on the Internet.  Wind advocates claim that wind is cheaper, but then lose all credibility when they also contend that wind energy is free.  Wind may be free, but capturing it is not.  Coal could be said to be free before anyone decides to go after it.   <o:p></o:p> Previous business models for electrification have weighed it against transport profit.  The new model weighs it against the prevention of a national crisis.  The two objectives are not comparable.  So there is no guarantee that electrification, according to the new purpose, will reduce costs.  The new purpose may call for sacrifice and higher costs in order to confront the national crisis just like the cost of going to war, for example.   <o:p></o:p> Railroads say that electrification will be too costly without government funding.  If railroads cannot raise or risk the capital for electrification, would they be willing to borrow it if the government would lend it to them?  If they are not willing to borrow the money, and the government is willing to fund it anyway, and wants to fund it in the national interest, what role would government then play in the operation of the electrified railroads?  Wouldn’t the taxpayers insist on some form of direct government management of the public investment in electrification such as what is being done with GM and Chrysler? <o:p></o:p> While one scenario would be for the government to offer a direct subsidy to the railroads in order to spur electrification, another scenario would be for the government to impose carbon caps that would make diesel operation so costly that they would have to electrify in order to survive.  If railroads cannot raise the capital to electrify on a voluntary basis, what will they do if the imposition of carbon caps forces them to electrify? <o:p></o:p> How would UP, CSX, NS, and BNSF each feel about becoming a small private operating component of a larger nationalized rail electrification system?  <o:p></o:p> <o:p></o:p> <o:p></o:p> <o:p></o:p> <o:p></o:p> <o:p></o:p>
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