futuremodal wrote: Datafever wrote:And if that is the case, then the GM/Ford analogy would still hold, as I would presume that GM would charge Ford for the lost production capability. Therefore, GM really loses nothing by investing in new production capabilities that can then be used by Ford. In fact, GM should be able to actually make money on the deal if it charges Ford enough. No, because autos are not homogenous. GM cars are designed and built to confidential GM standards, Ford cars to Ford standards, etc. If all cars were of one standard design, you could in theory support the notion of a private auto plant builder hosting the production needs of various automakers. Since they're not, it's misplaced speculation.
Datafever wrote:And if that is the case, then the GM/Ford analogy would still hold, as I would presume that GM would charge Ford for the lost production capability. Therefore, GM really loses nothing by investing in new production capabilities that can then be used by Ford. In fact, GM should be able to actually make money on the deal if it charges Ford enough.
No, because autos are not homogenous. GM cars are designed and built to confidential GM standards, Ford cars to Ford standards, etc. If all cars were of one standard design, you could in theory support the notion of a private auto plant builder hosting the production needs of various automakers. Since they're not, it's misplaced speculation.
Faulty analysis of the analogy. The AUTOs aren't homogenous, but the assembly plants COULD BE, to a very large extent. All that would be needed were some industry standard for the material handling machinery interfaces, etc. The cars and their components would remain proprietary design.
All analogies fall apart at the edges, but this one has a long way to go and actually demonstrates why control of the ROW is very important part of the total RR service product.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
futuremodal wrote:Contrast that with the transportation sector, where we at least have trucks as the mode of last resort to provide a high cost alternative to the lack of true free market railroad services
Contrast that with the transportation sector, where we at least have trucks as the mode of last resort to provide a high cost alternative to the lack of true free market railroad services
MP173 wrote: Dave:THe utility companies in Illinois have been profitable to date. I know, I own shares in AEE (ameren) and I do read the annual report and the proxy. Now, if rates are going up 50% next year and the only difference is the deregulation...then how do you explain it.
Dave:THe utility companies in Illinois have been profitable to date. I know, I own shares in AEE (ameren) and I do read the annual report and the proxy.
Now, if rates are going up 50% next year and the only difference is the deregulation...then how do you explain it.
Well, earth's temperatures are going up, and the "only difference" is atmospheric CO2 from the burning of fossil fuels............
Of course, to suggest in both scenarios that "the only difference" is the one variable taken out of context is purely sophistric.
We are living in an age where energy demands are growing at an astronomical rate, but our ability to build the necessary power plants (or even to adaquately maintain the ones we've got) to keep up with that demand is severely curtailed by environmental regs, NIMBY's, et al. The one good thing that is happening to forestall a complete energy delivery meltdown is the advent of private merchant energy companies, who are taking that high risk avenue to provide new energy sources despite all the ecoregs, NIMBY's, et al.
Now, consider this: If not for access to the existing transmission grid, that merchant energy sector would not even exist. Then what do you think would be happening right now? Market based energy is still better than no energy. You see, there really is no practical energy source of last resort if electricity cannot be delivered - we're not going back to kerosene lamps and abacii any time soon. Contrast that with the transportation sector, where we at least have trucks as the mode of last resort to provide a high cost alternative to the lack of true free market railroad services - high cost transport is better than no transport.
There is a big difference in the rail sector, and that is the fact that it is the only transportation mode that is not open access. So when the rail grid is opened up to non-rail transportation companies, what you would see is a general lowering of comprehensive transportation costs, as freight currently moving by the mode of last resort (aka higher cost trucks) will shift back to it's more natural modal relationship (aka lower cost trains).
And, please, the fact that I have mentioned something twice should place me in the penalty box.
"Dishonest"? I dont think in 50 plus years I have ever been called that.
The utilities are seeing an opportunity to maximize their profits. It is a brave new world, unless you are stuck with the 50% bill.
ed
MP173 wrote: Lets ask the folks in Illinois and California how well open access for the utilities has worked. Hmmm. shortages of electricity in California earlier this decade and...hold your hats electric rates going up 50% plus in Illinois with the open access/deregulation scenario. ed
Lets ask the folks in Illinois and California how well open access for the utilities has worked.
Hmmm. shortages of electricity in California earlier this decade and...hold your hats electric rates going up 50% plus in Illinois with the open access/deregulation scenario.
Ed,
This is the second time you have wrongly associated region specific energy problems to open access. The problems in California are well known, as they involved a very skewed partial dereg scheme that backfired as predicted, coupled with the general atmosphere of environmental idiocy that lends itself to feelgood foolishness such as carbon taxes, renewable mandates, and of course our crabby neighbor known as NIMBY. Illinois is probaby in the same boat of environmental extremism metastisizing itself into misplaced public policy.
To suggest that either State's energy price woes are related to the open access concept is just plain dishonest.
Datafever wrote: futuremodal wrote: Datafever wrote:Thank you for clarifying that for me, but I am still not very clear on where this would lead to.A company that owns infrastructure in a high traffic corridor is probably going to negotiate rates that are fairly reasonable. That company will also probably do a pretty good job of maintaining its infrastructure, because that's where the money is. In such a situation, there probably isn't even any need for any form of government regulation.But how about a company that own infrastructure in a low traffic corridor (a branch line out in the boonies). I only see two possibilities.One is that the company charges sufficiently to cover the costs of all infrastructure maintenance and make a profit on top of that. This will probably be quite high, and therefore the shippers are really no better off than they were before.Two is that the government regulates the price that can be charged. This will likely not cover the cost to maintain the infrastructure. Over the years, the infrastructure deteriorates to the point of becoming unusable. And in this case, the shippers are worse off than they were before as they now have nothing instead of an expensive something. On regulation, we in the utility sector have done quite well with a regulated infrastructure. There is no reason to assume that utility regulation of the rail infrastructure would not have the same positive results. Are there any utility companies that only own infrastructure for a "light traffic" corridor? It seems to me, and I might be wrong, that it is much easier for a utility to spread the cost of infrastructure maintenance over its entire customer base. Also, the utility probably has expectations of future expansion into those remote areas. Whereas the owner of railroad infrastructure would probably be more likely to sell that portion of their infrastructure that costs more to maintain than the business it generates.
futuremodal wrote: Datafever wrote:Thank you for clarifying that for me, but I am still not very clear on where this would lead to.A company that owns infrastructure in a high traffic corridor is probably going to negotiate rates that are fairly reasonable. That company will also probably do a pretty good job of maintaining its infrastructure, because that's where the money is. In such a situation, there probably isn't even any need for any form of government regulation.But how about a company that own infrastructure in a low traffic corridor (a branch line out in the boonies). I only see two possibilities.One is that the company charges sufficiently to cover the costs of all infrastructure maintenance and make a profit on top of that. This will probably be quite high, and therefore the shippers are really no better off than they were before.Two is that the government regulates the price that can be charged. This will likely not cover the cost to maintain the infrastructure. Over the years, the infrastructure deteriorates to the point of becoming unusable. And in this case, the shippers are worse off than they were before as they now have nothing instead of an expensive something. On regulation, we in the utility sector have done quite well with a regulated infrastructure. There is no reason to assume that utility regulation of the rail infrastructure would not have the same positive results.
Datafever wrote:Thank you for clarifying that for me, but I am still not very clear on where this would lead to.A company that owns infrastructure in a high traffic corridor is probably going to negotiate rates that are fairly reasonable. That company will also probably do a pretty good job of maintaining its infrastructure, because that's where the money is. In such a situation, there probably isn't even any need for any form of government regulation.But how about a company that own infrastructure in a low traffic corridor (a branch line out in the boonies). I only see two possibilities.One is that the company charges sufficiently to cover the costs of all infrastructure maintenance and make a profit on top of that. This will probably be quite high, and therefore the shippers are really no better off than they were before.Two is that the government regulates the price that can be charged. This will likely not cover the cost to maintain the infrastructure. Over the years, the infrastructure deteriorates to the point of becoming unusable. And in this case, the shippers are worse off than they were before as they now have nothing instead of an expensive something.
On regulation, we in the utility sector have done quite well with a regulated infrastructure. There is no reason to assume that utility regulation of the rail infrastructure would not have the same positive results.
There is a Canadian company that has just proposed building a transmission line down to California via SE Idaho. It is strictly an open access line - other power producers will utilize the line to ship electricity down to Terminator country. Idaho officials are very excited by this proposal as it will cross through the nuke reservation near Idaho Falls, allowing for the commercial development of nuclear generation facilities at the site.
futuremodal wrote: TomDiehl wrote: The reason open access has never been seriously discussed is that it never moved beyond theory in this country, and noone has ever shown the current owners of the railroads why it would be any advantage to split the property from the operation departments. Nobody has made any "end of the world dramatics" about this but you. Or come up with a feasible way to make this work better than what is already in place. Actually, is is seriously discussed, and it is already implemented overseas. Sooner or later, the anachronistic NA rail oligarchy will crack under the pressures of being dragged kicking and screaming into the 21st century. In the meantime, read through this, as you will be quizzed on it later: http://www.zetatech.com/CORPQIII44.htm
TomDiehl wrote: The reason open access has never been seriously discussed is that it never moved beyond theory in this country, and noone has ever shown the current owners of the railroads why it would be any advantage to split the property from the operation departments. Nobody has made any "end of the world dramatics" about this but you. Or come up with a feasible way to make this work better than what is already in place.
The reason open access has never been seriously discussed is that it never moved beyond theory in this country, and noone has ever shown the current owners of the railroads why it would be any advantage to split the property from the operation departments. Nobody has made any "end of the world dramatics" about this but you. Or come up with a feasible way to make this work better than what is already in place.
Actually, is is seriously discussed, and it is already implemented overseas. Sooner or later, the anachronistic NA rail oligarchy will crack under the pressures of being dragged kicking and screaming into the 21st century.
In the meantime, read through this, as you will be quizzed on it later:
http://www.zetatech.com/CORPQIII44.htm
Wow, another theory paper. So how does the current system in this country go from private ownership to this "utopian system" you've been pushing? There is no incentive given for the current owners to change, no financial advantage for them. Another example of "sounds good on paper" but no plan for implementation. Ideas like this are a dime a dozen. You need an analysis of how to implement this in the real world. Your references to an "anachronistic NA rail oligarchy" doesn't hold much weight until you can get a serious discussion on actually implementing this rather than parroting the theory.
And I've seen your quizzes, you need to read the whole thing you post/link before your questions would be valid.
futuremodal wrote: TomDiehl wrote: futuremodal wrote: Read Dick Hassleman's quote on Open Acess: "‘Open access’ is another misnomer. The industry needs to describe that as confiscation of plant, using an example such as ‘government forcing GM to let Ford build autos in one of GM’s newest plants.’ How can companies be expected to spend billions for plant improvement and maintenance if they cannot be the beneficiary of those improvements?” If Dick wants a more apt non-railroad analogy of open access, he needs look no farther than the utility sector, where pipelines and transmission lines are now hosting the offerings of non-owners. But of course, that analogy would only play to the benefit of open access advocates, since for the most part it has been a glorious success for the utility and energy sectors. Nope, let's go back to the nutso analogy, since that plays better to the railroad drama queens. The big question here is why railroaders simply cannot discuss open access honestly, even to disagree on it's desirability? Why all the end of the world dramatics? Lame example Dave, and it really isn't the same thing. How can you insure that the electrons put into motion by a particular power provider are the ones you're receiving at your home/business? The power grid is integrated so that all power is standardized at a given voltage and frequency, no matter which plant produces it. The same can be said about commodities moving through a pipeline. Any cargo carrier has to deliver the same item(s) to the destination that left the point of origin. Talk about a "nutso analogy" by a "drama queen." A boxcar put on the tracks in New York is homogenous to the one put on the tracks in SoCal. There is no production aspect of trackage that favors one company's car over the other, they all fit the same, they all connnect the same. For what it's worth, many products shipped by rail such as lumber do end up being unloaded far from their original presumed destination. Freight forwarders regularly divert shipments as demand warrants. So in that aspect, the railway is much like the pipeline - moving a homogenous product such as lumber that is indistinct from any other load of lumber. Again, such is a much better analogy than that auto plant nonsense.
TomDiehl wrote: futuremodal wrote: Read Dick Hassleman's quote on Open Acess: "‘Open access’ is another misnomer. The industry needs to describe that as confiscation of plant, using an example such as ‘government forcing GM to let Ford build autos in one of GM’s newest plants.’ How can companies be expected to spend billions for plant improvement and maintenance if they cannot be the beneficiary of those improvements?” If Dick wants a more apt non-railroad analogy of open access, he needs look no farther than the utility sector, where pipelines and transmission lines are now hosting the offerings of non-owners. But of course, that analogy would only play to the benefit of open access advocates, since for the most part it has been a glorious success for the utility and energy sectors. Nope, let's go back to the nutso analogy, since that plays better to the railroad drama queens. The big question here is why railroaders simply cannot discuss open access honestly, even to disagree on it's desirability? Why all the end of the world dramatics? Lame example Dave, and it really isn't the same thing. How can you insure that the electrons put into motion by a particular power provider are the ones you're receiving at your home/business? The power grid is integrated so that all power is standardized at a given voltage and frequency, no matter which plant produces it. The same can be said about commodities moving through a pipeline. Any cargo carrier has to deliver the same item(s) to the destination that left the point of origin. Talk about a "nutso analogy" by a "drama queen."
futuremodal wrote: Read Dick Hassleman's quote on Open Acess: "‘Open access’ is another misnomer. The industry needs to describe that as confiscation of plant, using an example such as ‘government forcing GM to let Ford build autos in one of GM’s newest plants.’ How can companies be expected to spend billions for plant improvement and maintenance if they cannot be the beneficiary of those improvements?” If Dick wants a more apt non-railroad analogy of open access, he needs look no farther than the utility sector, where pipelines and transmission lines are now hosting the offerings of non-owners. But of course, that analogy would only play to the benefit of open access advocates, since for the most part it has been a glorious success for the utility and energy sectors. Nope, let's go back to the nutso analogy, since that plays better to the railroad drama queens. The big question here is why railroaders simply cannot discuss open access honestly, even to disagree on it's desirability? Why all the end of the world dramatics?
Read Dick Hassleman's quote on Open Acess:
"‘Open access’ is another misnomer. The industry needs to describe that as confiscation of plant, using an example such as ‘government forcing GM to let Ford build autos in one of GM’s newest plants.’ How can companies be expected to spend billions for plant improvement and maintenance if they cannot be the beneficiary of those improvements?”
If Dick wants a more apt non-railroad analogy of open access, he needs look no farther than the utility sector, where pipelines and transmission lines are now hosting the offerings of non-owners. But of course, that analogy would only play to the benefit of open access advocates, since for the most part it has been a glorious success for the utility and energy sectors. Nope, let's go back to the nutso analogy, since that plays better to the railroad drama queens.
The big question here is why railroaders simply cannot discuss open access honestly, even to disagree on it's desirability? Why all the end of the world dramatics?
Lame example Dave, and it really isn't the same thing. How can you insure that the electrons put into motion by a particular power provider are the ones you're receiving at your home/business? The power grid is integrated so that all power is standardized at a given voltage and frequency, no matter which plant produces it. The same can be said about commodities moving through a pipeline. Any cargo carrier has to deliver the same item(s) to the destination that left the point of origin. Talk about a "nutso analogy" by a "drama queen."
A boxcar put on the tracks in New York is homogenous to the one put on the tracks in SoCal. There is no production aspect of trackage that favors one company's car over the other, they all fit the same, they all connnect the same.
For what it's worth, many products shipped by rail such as lumber do end up being unloaded far from their original presumed destination. Freight forwarders regularly divert shipments as demand warrants. So in that aspect, the railway is much like the pipeline - moving a homogenous product such as lumber that is indistinct from any other load of lumber.
Again, such is a much better analogy than that auto plant nonsense.
A boxcar loaded on the tracks in New York has a destination for that cargo. The cargo is most likely different than the cargo loaded in SoCal. Although the cars are, the cargo is not interchangable. A complete difference from electrical production. Freight forwarders occasionally change the destination of the cargo once in transit, but too much a rarity to be make a proper analogy.
As for your assertation that cars are different enough, by brand, that they can't be produced in another companies plant (based solely on this), not so. Plants have been sold from one manufacturer to another several times. With minor retooling, they do the work for their new owner. They are not brand specific.
Transportation services and rail infrastructure are for the most part modally homogenous. There's no real difference between BNSF-built track and UP-built track that would warrant any customer preference of one over the other. Such preferences show themselves in the service arena, not the physical plant. It is quite easy for a UP train to travel over BNSF tracks and vis versa. In fact, it happens in quite a few places around the country, which in and of itself pretty much proves that OA will work. But I haven't yet seen or heard of a production-based entity sharing it's facilities with a competitor.
Oops, but then I need to backtrack to open access. What is to prevent the owner of the infrastructure from charging an extravagant rate in those cases where there is no viable alternative?
In a totally free market, none. Which is why that utility aspect of railroading would most likely fall into the same regulatory oversight as electric utilities. As I state elsewhere, regulation of monopolies is a fact of life for our Western version of capitalism. Since the monopoly aspect of railroads is embodied in the infrastructure and not in the transporter services, it makes sense if we can limit the regulation to that monopoly aspect, and leave the transporter side of the industry relatively unregulated. To me that would make much more sense than what we have going on now in the halls of the STB, trying to determine a dozen or so Stand-Alone hypotheticals for the purpose of transporter rate oversight.
Of course, sans regulation, if an infrastructure owner wants to make any money, he'd need to charge a rate that will produce voluntary patronage. Revenue or loss from infrastructure ownership would be contingent on volume. The more users, the more revenue, up to physical capacity.
Datafever wrote:Oops, but then I need to backtrack to open access. What is to prevent the owner of the infrastructure from charging an extravagant rate in those cases where there is no viable alternative?
Wouldn't that be a "captive shipper?" Good point. FM?
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
Datafever wrote:The article brings up an excellent point against open access: Why bother spending a lot of money to build/maintain infrastructure if your customer base can be taken away from you by another railroad?
What he and others in the railroad industry are doing is using a narrow doomsday spin to describe a concept which inherently has wide open divergent possibilities. And it makes him and the others look like idiots in the process, because the only aspect that fits the "taking of property" scenario is nationalization, and virtually no one on the open access side, not ag interests, not coal interests, not UPS, is taking it to that extreme.
The GM and Ford example is just plain nutso. A GM plant is engineered to build GM cars to GM specs. All the automation is programed to fit those specs. Ford ain't gonna want to use a GM plant to make it's cars (and vis versa) unless Ford and GM get married. Production and it's inherent confidentiality aspects is a far cry from transporter services.
Privatized separation of infrastructure from transporter services is not confiscation. No property is being taken by force, since ownership shares would remain undiminished. It's basically a stock split, with part of it dictating ownership of ROW, and the other part dictating transporter services. And Mr. Hassleman, that is how the infrastructure owner will be the beneficiary of improvements - you host paying customers to use your line, whether they be the former integration partner, or the transporters of former integration competitors, or even the former pissed off customers running their own trains now. Once you've eliminated the anachronism of closed access integration with true intramodal competition, your customers lose their reason to b***h.
Most Interesting.
Let's see, now. Futuremodel, TomDiehl, Limitedclear, Greyhounds, (just for starters), and others?
http://www.railwayage.com/A/xfromtheeditor.html
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