Sorry Al - That huge waste of capital won't happen any time soon.
Al, where do you think the electricity is going to come from?
Even 1/3 of what you suggest will be a huge investment by the BNSF and then with the electricity shortage which occurs from time to time independent generation plants will be needed for much of this..Where will they be built? And will we lock up all of the 'bananas' and 'nimbys' while this is happening?
This is all much to complex for any meaningful solutions to be generated by those of us at this site.
Al in Stockton: I suspect Buffett may share your vision. Perhaps that is why he has been such a success.
C&NW, CA&E, MILW, CGW and IC fan
I wouldn't bet on it.
While BNSF is no longer a "pure play" railroad in the parlence of the street they will still be a big part of a well watched publicly traded corporation. While Buffett may not be concerned about yesterday's closing of BH stock or an analyst's forcaste for the next quarter, don't think for a minute that he would make a move that would have a high risk for a long term negative impact on the value of the stock.
It is not a question of whether Bufffett would "encourage" electirfication. In fact he specificly notes in his annual report that he and his number two man make the final decisions on the capital budgets for the wholly owned subsidiaries. From all I read, it doesn't appear that he is inclined to over rule the capital budget recommendations from his operating company managers, nor is there any indication that he that he stops sound capital proposals just to strip cash from the operating subs.
On the other hand, there are some big questions attendant to a project in the magnitude of electrification of BNSF's heavy mainlines. Could the railroad itself generate the cash necessary for the project? If not, would Buffett even consider using "extra" cash generated by other subsidiaries to finance the project? I guess the answer to both is maybe, at least it is not clear to me, but if both answers are no, forget it.
While Buffett say his acquisition of BNSF is an all in bet on the future of railroading, many think that at $100 a share, it is a reasonably safe bet. Frankly, I think electrification would have to be a financial slam dunk before he approved the project.
"We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics
I think this is part of what made BNSF attractive to Buffet.
The government wants the following:
1) Electrification of rail.
2) Use of rail corridors for new grid transmission to rail electrification and other uses.
3) Wind farms where the wind blows and land is available.
The use of rail corridors for electrical transmission will minimize the NIMBYS and speed up the transmission line approval process. The whole thing will be financed more by public money than by private capital. I bet it will begin within five years unless we have a complete economic collapse in the meantime.
Bucyrus I think this is part of what made BNSF attractive to Buffet. The government wants the following: 1) Electrification of rail. 2) Use of rail corridors for new grid transmission to rail electrification and other uses. 3) Wind farms where the wind blows and land is available. The use of rail corridors for electrical transmission will minimize the NIMBYS and speed up the transmission line approval process. The whole thing will be financed more by public money than by private capital. I bet it will begin within five years unless we have a complete economic collapse in the meantime.
I think your analysis is spot on.
1. Electrification is not a federal policy. There is no funding. There is no law. California might enact air emissions policies that might make electrification an economically lowest-cost option -- presuming that it didn't just price substantial volumes of rail service out of existence altogether -- but there is no "electrification policy" specifically in California, either.
2. Use of rail corridors for electric transmission corridors will not be any guarantee of a speed up of the transmission line approval process. There is no provision in the law that enables this to be an end-around on NEPA, nor any other environmental law. It might eliminate the need for land acquisition, but not necessarily, as rail corridors don't always have a spare, contiguous, strip of land available exactly where you want it to be available. Also, you have a last-mile problem, because eventually the utility corridor has to depart from the rail corridor and tie into existing substations. That can be sufficient to make the entire corridor a connected action, and enter NEPA.
3. Use of rail corridors for electric transmission might reduce local opposition. Then again it might not. The claim that it would is speculative and not supported in my experience in rail environmental assessment work. The opposition might in fact be even more fierce because the rail corridor is more likely to pass through built-up areas than a electrical corridor.
4. Electrification is a substantial net financial negative for a railroad company unless someone else is paying for the capital costs. Even then, it might still be a net negative unless the electrification is pervasive because partial electrification creates some real operating inefficiencies at the handoffs, and uninterruptible power can be very expensive, too. The more this ripples outward, the worse it gets: if power isn't available, and new generation capacity has to be constructed, then you have to find the natural gas, which might require a pipeline, which might create more NEPA nightmares, ad infinitum.
RWM
passengerfan passengerfan opines, in part, "Now that the BNSF has no shareholders to answer to..." ...Al - in - Stockton
passengerfan opines, in part,
"Now that the BNSF has no shareholders to answer to..."
...Al - in - Stockton
Strictly speaking, this is correct. In the sense you probably mean it, not quite so. That BNSF is now a wholly owned subsidiary of BNSF and its stock is no longer publicly traded means that it has no shareholders. HOWEVER, if you accept the proposition that shareholders are owners, then their ownership has been replaced by Berkshire Hathaway, itself a publicly traded company with its own set of shareholders. Just like BNSF had. The confluence of economic fortune and managerial acumen that brought BNSF to the point that Warren Buffett was willing to tender for all of its common had NOTHING, REPEAT NOTHING to do with expenditures on the electrification of all major mainlines. Moreover, as a publicly traded entity itself, Berkshire Hathaway (meaning Warren Buffett and his trusted lieutenants) has its own set of shareholders to whom it management must answer.
From the foregoing, I suspect the process by which BNSF went through its annual capital budgeting process, wherein the portfolio of projects under consideration is carefully considered and winnowed down to what the company plans to spend next year -- not all projects up for consideration get funded; some are deferred to some future period, and some are unceremoniously given the thumbs-down -- will go substantially unchanged under BNSF ownership. Instead of having a board of directors approve what BNSF management has selected, Berkshire Hathaway must do so. Berkshire Hathaway's thinking has to be colored by the use to which they put their capital. If a good company becomes attracxtively valued, then that purchase will compete with what the boys at BNSF wish to accomplish.
Barring sudden, enormous structural changes in the market for energy, I suspect Barkshire Hathaway management has better (more financially promising) claims on the scarce capital it has available, and that the subject of electrification, is it comes up at all, will be given an unceremonious thumbs-down.
billio Moreover, as a publicly traded entity itself, Berkshire Hathaway (meaning Warren Buffett and his trusted lieutenants) has its own set of shareholders to whom it management must answer.
Do Berkshire Hathaway shareholders question Mr Buffett? Don't they fully trust him before they buy in?
The degree of almost frantic naysaying on electrification in this and other strings almost makes me wonder if some work for our diesel manufacturers!
schlimmThe degree of almost frantic naysaying on electrification in this and other strings almost makes me wonder if some work for our diesel manufacturers!
After 30 years in the railway business I have a long list of things I've been accused of, but "frantic naysayer" is novel. I'll add it to my wall of fame!
So what else does it almost make you wonder? Isn't that just another way of saying it never once crossed your mind? But it did cross your mind? Ay-yi-yi, a paradox.
Railway ManSo what else does it almost make you wonder? Isn't that just another way of saying it never once crossed your mind? But it did cross your mind? Ay-yi-yi, a paradox.RWM
Touche!
Dale
Given yesterday's closing price of a share of Berkshie A at $99,689 and B's at $3320, I suspect that BH Shareholders trust Buffett much more than the average CEO. Never-the-less, his letters to shareholders in the annual reports are probably longer than the next 10 put together. So if he isn't answering specific questions, he sure does a lot of 'splainin'.
If and it is a very big if: BNSF under BH plowed all its net income back into the company infrastructure for say the next 5 years there are many projects that need to be completed before any electrification can even be considered.
The possible electrification routes first need curve straightening, maybe higher speed switches in CTC territory, planned double/triple tracking, grade easing, eliminating all clearance problems, raise critical trackage out of flood danger (more possible clearance problems) , a big item --- any bridges and tunnels that are near the end of their useful life, yards that will take the 10,000 - 15,000 ft trains that BNSF is already tending towards and electrification would make more viable, signal systems compatible with PTC and electrification, eliminate problem grade crossings that quiet electric motors would make more of a problem, etc.
All the above items really need to be addressed first so any electrification will cost less and the number of motors needed would be less. Another way to reduce the high initial capital costs.
Any other thoughts?
Not only what blue says,but will BNSF keep some diesels for running over trackage rights route miles? Then along with the flooding, Spring in the midwest is not fun. Lets look at some of Blues stuff.
K line is going to be a problem,easy to flood and right along the river.Bridge in Burlington is getting revamped but its still old.Yards will be fun to do up.I wouldnt want to be in galesburg figuring that mess of wire out,let alone Argentine.Someone on here brought up CTC, and a lot of the BNSF is NON CTC.There is a lot of ABS and dark territory out there. Do you keep those routes or sell them off?FRS is one where there is a lot of curves and ups and downs. Ar eyou going to want to fix that up to super high quality standards?
I think about that and then look at all your money going out! Sheesh Ill take 2% and retire tomorrow.
Yes we are on time but this is yesterdays train
Thanks to Chris / CopCarSS for my avatar.
Just curious> if a railroad, say BNSF for example, uses its rail corridors for new grid transmission, does it need to ask permission from other railroads, like UP, when it crosses UP's rail corridor?
If it doesn't own the land, or the air rights, it certainly would need to execute an agreement, and potentially money would change hands.
Could the second railroad simply say "no thanks" and refuse to execute an agreement, thus ending the first railroad's plans? ( Not to say that railroads would ever do anything to trip up a competitor.)
Murphy Siding Could the second railroad simply say "no thanks" and refuse to execute an agreement, thus ending the first railroad's plans? ( Not to say that railroads would ever do anything to trip up a competitor.)
Depends on whether the second railroad actually holds the air rights (it may not in some types of conveyances) and, if so, whether the power company would be able to condemn an air rights crossing. Under STB case law, a crossing condemnation like this could conceivably be permissible (there's a "Maumee" case that discusss the principle, but I don't have the compete cite readily at hand). One issue with high voltage transmission lines, however, is that they can interfere with railroad signal systems.
Murphy Siding Bucyrus I think this is part of what made BNSF attractive to Buffet. The government wants the following: 1) Electrification of rail. 2) Use of rail corridors for new grid transmission to rail electrification and other uses. 3) Wind farms where the wind blows and land is available. The use of rail corridors for electrical transmission will minimize the NIMBYS and speed up the transmission line approval process. The whole thing will be financed more by public money than by private capital. I bet it will begin within five years unless we have a complete economic collapse in the meantime. I think this is more like conjecture on your part. To me, it appears to be what Bycyrus thinks the government wants. I just don't see the connection between Berkshire Hathaway buying BNSF, and BNSF electrifying. Pehaps the government wants a chicken in every pot as well? Because BNSF hauls chicken feed, and because B-H is buying BNSF, can we conlude that B-H bought BNSF for the purpose of putting a chicken in every pot?
Gee, I did not mean to suggest that I have some kind of legal proof that the government will cause BNSF to electrify. I am just reading the writing on the wall, and there is a lot of it pointing to national rail electrification for sustainable transportation.
Here is a link to the plan. You could dismiss this as just a special interest think tank piece:
http://www.theoildrum.com/node/4301
But here is the same plan as the new mission statement from the FRA:
http://www.fra.dot.gov/Downloads/RailPlanPrelim10-15.pdf
Here it is from BNSF Matt Rose:
http://www.joc.com/node/410836/
I should clarify that when I say the government wants these items, I mean the party in power wants them. And at this point, it is only a matter of intent, so no government policy or funding is in place now. Moreover, if the political climate changes or if there is inability to generate public funding, none of these elements of electrification may ever come to fruition, or even be started. However, at this point, I think it is clearly where we are headed. The intent is there and I don’t see a problem paying for it. But just to be clear, while I expect it, I am not advocating it. In fact, I disagree with much of the rationale being used to support it.
I did not mean to suggest that electrification of all of the heavy mainlines would take place at once. But now that Abo Canyon is nearly completed and the BNSF has been experimenting with longer and longer trains along this line, as well as high speed crossovers have been installed for years along this line the trans con between Chicago and Los Angeles is ripe for electrification. Probably only from Barstow to Galesburg. I would think that the heavily congested traffic lanes between Barstow and Los Angeles and Long Beach would remain dieselized for the near future, although the Alameda corridor would be easily electrified. They obviously had future electrification in mind when it was built. The trackage between Galesburg and Chicago is another area that would probably remain dieselized for some time.
The second BNSF mainline that would probably be electrified would be the Chicago - Seattle line. But first there would be trackage improvements made such as longer sidings and high speed turnouts. The Cascade tunnel would be easily electrified as it has already been electrified once. I am sure that Marias Pass snowsheds have more than enough height to support electrification as well. At the same time it would make sense to electrify the Spokane - Portland and Portland - Seattle routes.
Probably third would be the PRB line south and and east to Texas and Nebraska with the Denver - Galesburg section to follow. This quite possibly would force MRL to electrify there mainline as well.
More trains can be operated over electrified lines than can be operated over conventional diesel powered lines in the same 24 hour period. And electrification would put more safeguards in place, although the government has already addressed that concern.
Berkshire Hathaway has major holdings in utilities that produce electricity as well as in such firms as GE that produce wind generators and just about everything else necessary for electrification. I realize they also produce diesels. But in China they also produce heavy electrics. They are fully capable of producing heavy electrics here if necessary in the US.
The government seems to be placing to much hope in Wind and Solar energy to supply our power needs for the future. Here in California where pending lawsuits against the wind generators could shut them down for three months each year we are going to be in a bind for power if that happens. And I would not bet that it won't happen. Nuclear power plants like Rancho Seco need to be brought out of mothballs and reactivated and additional Nuclear plants built. California has a ban on coal fired generating plants and new dams are out of the question in California for power or any other reason. And remember California is on the verge of building a HSR system that will be fully electrified as will the Peninsula commuter rail system Caltrain between San Francisco and Gilroy.
When the RRs return to pre-recession traffic levels and those stored power units come back on line for the UP and BNSF many of the older at present stored units will be banned from California for new emissions laws going into effect in the very near future. Those units that do not meet the emission standards of California will be permanently banned. That is just another reason it would be in BNSF's best interest to look to electrification of the southern trans con as soon as possible. Its going to get very expensive for both the UP and BNSF to be changing power in Arizona, Oregon and Nevada for all trains with older units before entering California.
Al - in - Stockton
passengerfanProbably only from Barstow to Galesburg. The second BNSF mainline that would probably be electrified would be the Chicago - Seattle line.
The second BNSF mainline that would probably be electrified would be the Chicago - Seattle line.
I've been thinking San Bernardino to Argentine (arrival and departure tracks only) would be more likely? And perhaps Northtown rather than Chicago on the Northern Transcon?
passengerfan Now that the BNSF has no shareholders to answer to I would just about bet they will be the first of todays RRs to electrify at least there major mainlines. I believe the government will do it with the BNSF using tax credits to repay the government. They are the only RR in this position. All of the others have shareholders to answer to while Warren Buffet would probably encourage electrification. It sure would mean a lot of new jobs installing and producing everything necessary for electrification. I believe they would only need to electrify the major mainlines such as the transcontinental LA to Chicago, Seattle to Chicago. Powder River to Texas and midwest. Chicago to Denver and Kansas City to Texas. They have enough newer diesel power to handle all other lines that would not have the traffic to warrant electrification at the present time and could slowly electrify other lines as the twenty year lifespan of the diesels wear out. Al - in - Stockton
Wouldn't BNSF then answer to Berkshire Hathaway shareholders? Not that most of us could afford even one share of their class A stock...but BH is more than just Warren Buffett...
passengerfan Now that the BNSF has no shareholders to answer to I would just about bet they will be the first of todays RRs to electrify at least there major mainlines. I believe the government will do it with the BNSF using tax credits to repay the government. They are the only RR in this position. All of the others have shareholders to answer to while Warren Buffet would probably encourage electrification.
Now that the BNSF has no shareholders to answer to I would just about bet they will be the first of todays RRs to electrify at least there major mainlines. I believe the government will do it with the BNSF using tax credits to repay the government. They are the only RR in this position. All of the others have shareholders to answer to while Warren Buffet would probably encourage electrification.
You're kidding, right? Because after this acquisition I will be a shareholder in the organization that controls BNSF. Prior to this action the company I own a share in controlled a percentage of BNI stock. And in my experience, Warren Buffet does more to answer to shareholders than almost any other leader of a publically traded company in the nation.
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nanaimo73 passengerfanProbably only from Barstow to Galesburg. The second BNSF mainline that would probably be electrified would be the Chicago - Seattle line. I've been thinking San Bernardino to Argentine (arrival and departure tracks only) would be more likely? And perhaps Northtown rather than Chicago on the Northern Transcon?
I also think the amount of traffic between Argentine and Galesburg would warrant electrification as well.
I also think that since much of the traffic on the Northern trans con travels through to Chicago that Galesburg would be the ideal electric terminal for both.
The one I question is Galesburg to Denver. I don't know that traffic levels on this line would warrant the cost of electrification, although it is the most direct route between Denver and Chicago.
The PRB would be a natural for electrification due to the sheer volume of traffic in and out. Obviously the amount of diesel fuel saved here could be an argument for electrification.
It seems to me that if the BNSF begins electrificationit will have a ripple effect on the other major RRs to electrify there major lines as well.
He who has to much time on his hands this time of the year.
The only potentially postive economic rationale for electrification of which I am aware is the avoided cost of air emissions, and only if the cost per ton of avoided CO2, NOX, VOCs, and PMs are increased dramatically above current levels. There is no business case for electrification -- not even the thinnest hope of one -- if the only thing we are going to do with it is avoid buying diesel fuel and maintaining diesel-electric locomotives. Not at $8/gallon diesel fuel, either.
Debating which lines should be electrified first as a business case proposition is like saying, "Which company should we aquire first: the one that will lose $1 billion, the one that will lose $5 billion, or the one that will lose $10 billion?"
passengerfanThe government seems to be placing to much hope in Wind and Solar energy to supply our power needs for the future. Here in California where pending lawsuits against the wind generators could shut them down for three months each year we are going to be in a bind for power if that happens.
The lawsuits against wind generators and the government’s preference for wind power may seem to be at cross-purposes, but I think the conflict is an anomaly arising from the unforeseen contingency of bird kills. Otherwise, the environmental and climate views of California perfectly match those of the current administration, congress, and the green movement. Those views do not simply demand that energy production is clean or low emission. They demand sustainability, and that requires energy to be from a renewable source such as wind and solar.
Nuclear is not renewable, so it does not support sustainability. Beyond that, the waste handling is thought to be an unacceptable risk of toxic emission, and waste storage itself is not sustainable. So, for as logical nuclear is as a substitute for coal, it is not acceptable to the green movement.
California is on the cutting edge of the sustainability movement, and that movement prefers wind-generated electricity. However, what it prefers more than renewable energy is conservation. Conservation is the centerpiece of sustainability. The lawsuits against windmills are a clash between conservation and consumption. Consumption demands windmills and conservation reduces the number of windmills and their related bird kills. The only alternative resolution is making windmills bird-safe.
BucyrusOtherwise, the environmental and climate views of California perfectly match those of the current administration, congress, and the green movement.
Otherwise, the environmental and climate views of California perfectly match those of the current administration, congress, and the green movement.
That statement flies in the face of all evidence before me in my profession. There is no consensus among anyone anywhere about anything.
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