PNWRMNM [snipped] [UP's 2009 data is that it] Burned just under 1 Billion gallons of diesel fuel
PNWRMNM [snipped] Obviously at some oil price point electrification will be cost effective. No one has offered any data, credible or not, as to what that price point is. That is the big question.
PNWRMNM Electrification in and of itself does not increase capacity! No one has demonstrated that the Pareto Principal, also know as the 80/20 rule applies to rail freight traffic density.
With respect - I'm not understanding how the "Pareto Principle" is applicable to this discussion or your post. Can you expand on or explain that a little further ? Thanks in advance.
- Paul North.
Can someone explain why we should all of a sudden strive to be an oil-free society?
Whether we get oil here or imported it, we still have to pay for it. The foreign sources that have oil also need people to buy their oil. There is a competitive world oil market setting the price according to supply and demand. We may be running out of oil, but we are not there yet. And as we do run out, the market will gradually find substitutions at its own pace. And, we have national policies that are discouraging domestic oil production.
Becoming independent of foreign oil could be advanced by stepping up domestic production, but that option is not on the table for larger reasons of an environmental nature. So in the final analysis, it is not just an objective of becoming free of foreign oil. It is a matter of stopping the use of oil. Why are we being asked to give up oil at an enormous cost?
I think this proposal to electrify the railroads to achieve oil-free society is overstating a problem to turn it into a crisis that supposedly needs some swift action; a kind of Marshall Plan to go non-oil for national security, if you will.
Paul,
The Pareto Principle is the 80/20 rule. The two documents cited have invoked it to claim that 80% of the traffic is on 20% of the mileage. Their conclusion is thus that by electrifying 20% of the mileage, 80% of the traffic will move by fuel other than oil. Rather they mean route mileage or main track mileage I have no idea, since they have not made that detail clear. My point is that by either name the authors have offered no evidence that the principle/rule applies in this case.
Mac
As I stated before, all Presidents, GOP and Dem. have been calling for "reducing our dependence on foreign oil" through conservation and alternatives (there isn't enough oil here) since Richard Nixon (40+ years ago). Hardly a sudden development. Having a national policy as opposed to letting market forces determine is nothing new or unique, dating back to the early 19th century and continuing through the 20th. Nothing unusual, new or radical about that. All it would take would be an incident in the Persian Gulf to have us again wondering why some President didn't push for conservation and alternatives. No one is calling for an oil-free (oh, some extreme folks of the Peak Oil fringe might) US economy. But reducing our use of it for transportation (quite possible) is important because it is more hard to replace its uses in the chemical and plastic industries.
C&NW, CA&E, MILW, CGW and IC fan
Mac:
80/20: A rule much quoted in business that states that eighty per cent of a firm's business is derived from twenty per cent of its customers; also that eighty per cent of its business is obtained by twenty per cent of its sales force. The rule derives from the work of Pareto.
A random variable x with the simplest type of Pareto distribution has probability density function given by
where a and k are positive constants.Pareto proposed the distribution in terms of its cumulative distributive function {1−(k/x)a} which he believed gave a good approximation to the proportion of incomes that were less than x. According to Pareto the shape of the income distribution was the same for all countries, though the values of a and k varied from country to country.
Seeing if that principle applies to rail traffic density as well should be possible to determine.
Reviewing the back of the envelop arithmetic, the gross earnings before taxes of railroad industry for the past 4 years averaged $15 billion. Earnings after taxes, average about 63%. So, 37% of earnings available for shelter. If income were sheltered for 30 years, potential option. Or, a combination of guaranteed bond together with income shelter. Or, add government matching funds of some sort.
Schlimm,
I agree it should be possible to determine how many route and track miles handle 80% of the traffic. My point is that the proponents of spending $500 billion (their number) have not bothered to determine that. They simply assumed that it applies.
Correct. Back of the envelope arithmetic has problems. What was looked at was before tax income, not net. Even with that, it does appear that diverting taxed income to public interest funding of electrification and associated upgrades would require 30 years to payoff assuming static earnings.
In reality, the upgrades would create new and increased earnings going forward. That's where business and engineering expertise comes into the picture. But, to get there, consensus needs to be made as to the fact that a non-oil based transportation system is indeed useful for national defense and economic growth.
The vulnerability caused by being reliant solely upon an oil based transport system cannot be understated whether a constrained oil supply is by hostility or by competition.
In an economy money is like the atmosphere and air that the body uses. Transportation in an economy is like the circulation system needed by the body.
The timing and development of alternative sources of energy is not predictable. Having access to a non-oil based transportation system is predictable and provides options for an oil constrained future.
The convergence of transportation capacity constriction beginning in 2020 and worsening in 2035 should be anticipated and most efficiently addressed by freight railroad electrification.
Foreign oil purchases contribute to a negative balance of payment account. The long term negative import / export account, balance of payments, weakens the national economy.
WilliamKiesel But, to get there, consensus needs to be made as to the fact that a non-oil based transportation system is indeed useful for national defense and economic growth.
But, to get there, consensus needs to be made as to the fact that a non-oil based transportation system is indeed useful for national defense and economic growth.
But is that really a fact? I do not believe that a non-oil transportation system is all that necessary. I don't deem it worth the cost. Why do you think it is?
Bucyrus: Not to be testy, but why do you insist that anyone (with any credentials) is talking about a totally non-oil system? Do you believe that shifted some percentage of transportation to a non-oil basis is foolish?
WilliamKiesel Reviewing the back of the envelop arithmetic, the gross earnings before taxes of railroad industry for the past 4 years averaged $15 billion. Earnings after taxes, average about 63%. So, 37% of earnings available for shelter. If income were sheltered for 30 years, potential option. Or, a combination of guaranteed bond together with income shelter. Or, add government matching funds of some sort.
Thanks to Chris / CopCarSS for my avatar.
schlimm Bucyrus: Not to be testy, but why do you insist that anyone (with any credentials) is talking about a totally non-oil system? Do you believe that shifted some percentage of transportation to a non-oil basis is foolish?
Depends what percentage, I guess. My hometown is on a former PRR/PC/CR electrified route. I guess the handful of electric operations that conrail had weren't enough to justify keeping the wires up.
Also, if the price of oil does go through the roof, won't the economy completely crash and train traffic will be severely hurt (electric or diesel)?
Just some questions from a lowly brakeman.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
Be very careful when describing the amount of taxes any railroad has available to be sheltered. Any corporation's provision for state and federal income taxes consists of two components -- current and deferred. The current portion is the money that will actually be paid now; the deferred portion is assumed to be due at some future point in time from income earned now.
To take two examples (before the current economic unpleasantness) from 2007. NS Corp had a $250 mil current tax provision and $338 mil deferred -- see footnote 3 of their annual report. Thus, they have already sheltered more than half of their income from today's tax collectors. UP had $822 mil current and $354 mil deferred, see footnote 4.
On a philosophical basis I tend to dislike special tax deals, even when they serve some worthwhile purpose. The problem is that your worthwhile purpose may be different than mine. Moreover, the availability of special deals leads to a small army of lawyers and accountants trying to jump through complex hoops to claim the benefit. It strikes me a more simple and open process is to go ahead and collect the taxes and then underwrite those activities that the majority of us deem worthwhile.
Bucyrus makes that point because that's how the topic has been presented: electrify to eliminate dependency on oil. While it sounds a lofty endeavor, like so many other things in this country, it is the right thing for the wrong reason. Thus its results will not appease expectations and therefore be deemed a failure even before it is begun. Find the right reasons to electrify then do it for the right results.
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.
I did try to clarify that that there are basically two proposals for electrification:
1) The most long running proposal is the one based on private business economics.
2) The other proposal, more recently developed is based on the government electrifying the railroads to save the planet.
As far as I know, prior to this thread, this second proposal has only been discussed once on this forum, and that was in this thread:
http://cs.trains.com/TRCCS/forums/t/162687.aspx?PageIndex=1
The first proposal has been discussed in probably 100 threads. Many who discuss the first proposal are simply not aware of the second proposal. I would not have brought up the second proposal on this thread had it not appeared to me that the original poster had made it the topic of this thread.
My preference is that the first proposal is fine with me because it will not hurt me. However, I regard the second proposal is being a dishonest political power grab that will hurt all of us. I suspect most electric railfans would support the second proposal, however, because they would see it as free electrification from the government.
Henry,
Why is electrification the right thing? What reason would be right?
If electrification is right, why have the carriers not done it? There are two likely possibilities the return on investment is not sufficient to support the investment, or the carriers do not believe they can finance it on the open market even at today's historically low interest rates. Answer #2 is just a variation on #1.
I think we can take the decision of management not to string wires as strong evidence that electrification is not a good investment. No one in all of this has put forth a credible economic case for electrification.
I personally believe that there will be a point, fairly soon, when the world encounters "peak oil" production. That is a condition in which oil output is physically constrained rather than artificially constrained by OPEC. At that point oil prices will begin a relentless rise in prices. Congress will go through its monkey dance and the best we can hope for is that they do not do something stupid.
This oil price rise, in and of itself, will tend to shift freight from long haul truck to rail. Since fuel is a much smaller portion of rail operating cost than truck operating cost this shift will be driven by fundamental economics, as truck costs increase faster than rail costs.
Once management believes that rising oil prices are real and will be sustained, the business case for electrification will look better, but prices for other fuel sources will also tend to increase so the relative ballance may not change much.
The vast majority of oil use in this country is auto gasoline. Since 1945 we have spread our economy out and made virtually everyone dependent on automobile transportation for work, for shopping, for entertainment. Electrifying freight railroads will do nothing to address this, the 800 pound gorilla in the room. To reduce auto consumption will require a long time, say 50 years, to revise our economic geography by abandoning the suburbs and moving into skyscraper apartments in the cities. This holds no charm for me or a lot of other people but I will be dead and the kids will not know anything else, kind of like they can not imagine life without cell phones.
Credible passenger service will require massive new construction that may or may not involve existing rights of way. That separate issue will look a lot like Amtrak's recent proposal about the NEC.
Having the freight rail system not dependent on oil strikes me as a good idea. The only way I can see a national defense angle in it is that the freight railroads could operate through a politically/war induced loss of oil supply, not that it would make much difference to our oil dependence in general. I think that having the government spend $500 billion for that reason will be a tough case to make. If it is to be made the proponents will have to be accurate in their claims and not mix freight and passenger services. The documents cited in this thread are simply so full of factual errors that they are not credible on their face.
I was not endorsing electrification but pointing out that it might actually be a good thing just not for the reasons presented. Offhand, yes, I like electrification for high density and urban areas for both speed and environmental reasons but would certainly not say that every line in and out or through urban areas should be electrified. There might be some heavy grades out in the hinterlands, too, that might benefit from electrification because of the cheapness of electricity to generate the horsepower and adhesion; it might also be an environmental factor, but not the main reason to do it. Each application has to be done on a case by case basis. But as was posted, to electrify just for environmental reasons and not taking into account any other reasons might prove fatal.
I assume people are talking about a non-oil system because that is what the original poster said. Granted, it would not be an instantaneous conversion to oil alternatives, but “non-oil” does mean totally non-oil. The objective of a non-oil system is all over the source material related to the topic started by the original poster. Even the FRA cites the achievement of a non-oil system as the main justification for HSR.
Do I believe that shifting some percentage of transportation to a non-oil basis is foolish? I don’t know. It depends on the reason for doing so, and it depends on who is doing the shifting. If it is done by the public sector as a sort of down payment on the entire conversion, and the stated purpose is to ultimately create a non-oil system, then yes, I do think it is foolish.
To get back on track. (?) Nobody is more dependent on oil than the oil companies and they are not sitting on their hands. Several of them have contracts to build and provide synthetic fuel made by the Fischer - Tropse method to produce synthetic Jet A for the Air Force and United Airlines is involved too. The most interesting possibility is Exxon - Mobil investment in genetically engineer diatoms that will produce the correct fuel without it having to be refined. SASOL in South Africa has the most experience right now with producing synthetic diesel fuel used on South African railways in conventional diesel locomotives. I would like to see a plant built in Wyoming coal mining area to refuel all the locomotives and all the mining equipment.
The problem with all this is that if synthetic fuel is developed too fast it will drive down the market price for the conventional stuff. I think they need about $ 70 a barrel to make it worthwhile.
Electrification to be functional requires that the railroad industry electrifies.
Had the PRR had the will and courage, the electrification should not have ended at Harrisburg. It should have been built to Pittsburgh. Had it been, it would have been more of a factor in WWII than it was. In WWI the railroads became a quagmire. In part, the absence of electrification contributed totheproblem. The Federal government operated the railroads for a number of years. My memory is that Government operation and control lasted until 1920. Had there been electrification, that Government control might not have happened. And, had there been electrification to Pittsburgh, there would have been sufficient earnings to to have perhaps avoided a Penn Central merger.
WilliamKiesel Electrification to be functional requires that the railroad industry electrifies. Had the PRR had the will and courage, the electrification should not have ended at Harrisburg. It should have been built to Pittsburgh. Had it been, it would have been more of a factor in WWII than it was. In WWI the railroads became a quagmire. In part, the absence of electrification contributed totheproblem. The Federal government operated the railroads for a number of years. My memory is that Government operation and control lasted until 1920. Had there been electrification, that Government control might not have happened. And, had there been electrification to Pittsburgh, there would have been sufficient earnings to to have perhaps avoided a Penn Central merger.
WilliamKiesel Electrification to be functional requires that the railroad industry electrifies.
Is there some meaning in that statement besides its being a tautology?
PNWRMNM Why is electrification the right thing? What reason would be right? If electrification is right, why have the carriers not done it? There are two likely possibilities the return on investment is not sufficient to support the investment, or the carriers do not believe they can finance it on the open market even at today's historically low interest rates. Answer #2 is just a variation on #1.
And there's a bit more subtle point. In order for electrification to be economical, the cost of electricity from the grid must be substantially less than the cost of electricity from a traction alternator connected to a diesel engine. A related point is that electrification would require more installed capacity, which in the last couple of decades has mainly been plants that can run on oil or natural gas. Since natural gas prices have until very recently tracked oil prices, it was likely cheaper to burn diesel fuel in the locomotive than oil or natural gas in a central power station.
It hasn't helped that deregulation of the electric power market has led to wild swings in prices on the spot market, which makes buying diesel fuel look a lot safer in comparison. A major part of the reason for the wild swings is that generating capacity has not kept up with demand and that makes electrification a riskier choice..
- Erik
There are many reasons American railroads did not electrify or expand on electrification. The Depression did the most damage to the plans leaving many pocketbooks empty. Some roads feared making coal companies angry since coal was the major significant commodity they carried. Still others saw electricity being generated aboard a locomotive with a diesel engine negating the need to string wires. Others still did not see traffic patterns and volumes that necessitated another form of motive power. Transit seemed to benefit most from electric power because of the multiple unit control allowing for a string of cars each with an electric motor be controlled from one car but tractive effort be equal on each car; the result was quicker pick up and stopping, higher sustainable speeds, more trains per hour. PRR was running long distance, intercity, and commuter trains on the same tracks, similar to rapid transit, so it worked well out of NY and Philadelphia. But when it came to pushing up into the mountains, the PRR, DL&W, NH, and RDG, for instance, had to look longer and harder before laying out the money. If there were no Depression in 1930, then they may well have strung longer wires. That would be an interesting postulation of where the US would be today in regards to electrifying railroads if such had occured.
PNWRMNM Henry, Why is electrification the right thing? What reason would be right?
Forget the shouda, couda. Why is electrification of freight railroads the right thing TODAY or in the near future? You have made an assertion. Support it, preferably with some facts and economics. If you have no facts, why make the assertion??
Murphy Siding WilliamKiesel: [snip] Had the PRR had the will and courage, the electrification should not have ended at Harrisburg. It should have been built to Pittsburgh. Had it been, it would have been more of a factor in WWII than it was. . . . And, had there been electrification to Pittsburgh, there would have been sufficient earnings to to have perhaps avoided a Penn Central merger. I think you're flirting with revisionist pipedreams now. I seem to remember that PRR electrified because the government was willing to foot a lot of the bill during the depression to make jobs for the unemployed. [snip] Electrification of the PRR to Harrisburg would not have brought sufficient earnings to stop the inevitable.
WilliamKiesel: [snip] Had the PRR had the will and courage, the electrification should not have ended at Harrisburg. It should have been built to Pittsburgh. Had it been, it would have been more of a factor in WWII than it was. . . . And, had there been electrification to Pittsburgh, there would have been sufficient earnings to to have perhaps avoided a Penn Central merger.
[snip] Had the PRR had the will and courage, the electrification should not have ended at Harrisburg. It should have been built to Pittsburgh. Had it been, it would have been more of a factor in WWII than it was. . . . And, had there been electrification to Pittsburgh, there would have been sufficient earnings to to have perhaps avoided a Penn Central merger.
I think you're flirting with revisionist pipedreams now. I seem to remember that PRR electrified because the government was willing to foot a lot of the bill during the depression to make jobs for the unemployed. [snip]
Electrification of the PRR to Harrisburg would not have brought sufficient earnings to stop the inevitable.
No, the PRR electrified to help move its traffic in that territory - mainly passenger trains, to get them out of the way of the freight trains - but the freights, too. Those decisions for the main NYC-WASH corridor were made just before the Depression and during the early days of it, before its depth and duration became apparent. At one point after it was well underway, the project would have been stalled and postponed due to a lack of willing lenders then - sound familiar ? - but the Federal government stepped in with a couple of loans for part of the amount. Later on during the Depression the PRR decided to extend to Harrisburg, and that too may have received some government loans, but not for the entire amount.
I agree that electrification of the PRR to Pittsburgh - or at least Johnstown - was a missed opportunity. If you read Mike Bezilla's excellent history - really, of PRR's interaction with the technological innovation and development of all types of locomotives - you'll see that was because the PRR: 1) had a lot of trouble liking a decent heavy-duty electric freight locomotive - even though other railroads did, such as the N&W and VGN just a couple hundred miles to the south; and 2) the K4's for passenger service and the L-class Mikados and I-class Decapods, etc. for freights were so darn good that they raised a pretty high bar for any electric to clear. As Bezilla said, it was the only proposed electrification to be killed by steam locomotives - and post-WW II, by diesels.
I also agree that electrification of the PRR to Pittsburgh Harrisburg would not have brought sufficient earnings to stop the inevitable Penn Central merger and bankruptcy.
PNWRMNM PNWRMNM: Henry, Why is electrification the right thing? What reason would be right? Henry, Forget the shouda, couda. Why is electrification of freight railroads the right thing TODAY or in the near future? You have made an assertion. Support it, preferably with some facts and economics. If you have no facts, why make the assertion?? Mac
PNWRMNM: Henry, Why is electrification the right thing? What reason would be right?
Somebody is putting words on my paper and explaining thoughts I did not express! These questions and comments are from out of the blue and misdirected toward me. I never said or asserted any of these things! Go find the right guy and crucify him if you want to deride somebody.
WilliamKiesel It is not important as to why poor decisions are made and followed. It is important to identify them and change them. ...
It is not important as to why poor decisions are made and followed. It is important to identify them and change them.
...
I have just begun the process of reading-in to this discussion, and have no opinion...except that I have just encountered this statement which I feel is patently false in relation to my life-long experience. Understanding systems, systems analysis, and determining the root causes of protracted and repeated or new errors in process or deduction are key to success. For example, the culture and leadership at an institution often drive decision-making. The biases in what stands for factual information, data gathering, etc., will have a huge impact on outcomes.
I'll keep reading....
Crandell
See you post on Page 5 dated 1-25-11 at 7:53AM. What do your words mean if not that you think electrifying freight railroads is the right thing?
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