AMERICAN DREAM COALTION

Stimulus, Reauthorization and Mobility

Alan E. Pisarski

WHAT’S IN OUR FUTURE? STIMULUS PACKAGE TRUST FUND INSOLVENCY– AGAIN

VMT DOWN 3.6% FUELS DOWN 7.1% HTF REVENUE DOWN 11.6% vs forecast

REAUTHORIZATION OF SURFACE TRANSPORTATION LEGISLATION

STIMULUS PACKAGE—ARRA 789B$ TOTAL 27.5B$ HIGHWAYS 1.5B% DISCRETIONARY GRANTS

Corridors, TIFIA, Earmarks 8.4B$ TRANSIT 1.1 AIRPORT IMPROVEMENT GRANTS 850m$ AMTRAK; 450M$ security 8B$ HSR (plan due yesterday)

Transportation lost in the game “We got rolled” John Mica Ranking Member

House T&I AASHTO had “5000 shovel ready projects”

worth about 66B$ (hwys only) Bill uses standard formulas; no St. match States taking varied approaches

lots of small maintenance – paving, painting or few big ones (KS 4) Texas supporting toll road plans

1,800 projects obligated ($5.6b) this week

Next Reauthorization Due Oct 1, 2009 (6 years usually) Highways and transit; HSR? Congress always misses due date; 12

CRs last time They say they will be ready this time I doubt it – new Admin., no $$$$$

Next Reauthorization (2) Who will be in charge? WH, DOT,

Congress? New Secretary Ray LaHood alone No Senior staff– some announcements DOT might prefer a CR so that they

could be serious players next year If meet September goal then DOT’s

role limited

Next Reauthorization (3) Finance, Finance, Finance Stimulus package will affect

decisions Tolling, congestion pricing disliked

by leadership but few options More afraid of gas tax increases Is private sector still ready with $$$ Devolution by Default ??

Next Reauthorization (4) Maybe reorg DOT away from

modes to “functional structure” = intercity; metro

Metro mobility = transit, bikes, walking

Intercity; tourism weak Watch private freight rail New focus on land use policies

State of play in national legislation – Financial issues –

Not close to increase in last cycle (40%) Needs put at 2x funding Fed Gas tax at 18.4¢ doesn’t = 3¢ in 1956 Fed share of capital about 40 % Some opportunities regarding revenues “Innovative Finance” as alternative

INNOVATIVE FINANCE AIN’T MONEY

THREEWAY CONFLICTS TRANSPORTATION LEGISLATION ENERGY LEGISLATION GHG LEGISLATION

Cap and Trade – rebate or spend? Carbon Tax Air could catch brunt of plans after

roadsALL ANTAGONISTIC TO MOBILITY

EFFICIENCY VS EQUITYThe Efficiency/Equity argument is

fundamental to any regulatory process

EQUITY = your responsibility for share of solution should equal your share of the problem!

EFFICIENCY = do most cost-effective first and solve more of the problem per $

TRANSPORTATION VS OTHER GHG OPTIONS Options for alternate

fuels in other sectors are greater. MOST COST EFFECTIVE

Main focus should be electricity generation.

WHY IS TRANSPORTATION SINGLED OUT AS ONLY SECTOR TO HAVE OUTPUT CUT?

No one suggests farm output or industrial output should be cut by their share of GHG !

Impacts on mobility Energy; GHG = CUT VMT! Metro Mobility = Walk, Bike, Transit Coalition w/HUD = use Transportation $$

for land use coercion and subsidies Emphasis on Tolling/Pricing but not market

driven; pay-at-pump insurance VMT tax = tax travel based on where, when

and what you are doing

GOAL IS TO SUPPRESS VMT – GHG IS JUST THIS YEAR’S EXCUSE

The policy conflict = opposed thinking about the world Neighborhood

Shorter trips Walk/bike Land use solutions Design What’s freight? Accessibility Public Mass Behavior change Make it happen

Globally Integrated Longer trips Broad “community” Choices Market forces Major role for freight Mobility Private Personalized Technological fix Let it happen

The Right Answer Should At Least Be Among The Options Available! This is A Real Problem even independent

of global warming Fuel costs Energy Security Economic Uncertainties

This Is A Real Problem With Little Resources

FOCUS ON EFFICIENCY Selling Bad Solutions To A Real Problem Should Be Out!

Research / Economic Analysis / Performance Measurement should be key

The focus on changing behavior diverts us from the real issues Enhancing economic opportunities Access to workers; access to jobs Mainstreaming minorities Safety Serving an aging population Greater freedom of mobility Infrastructure Reconstruction More!

A closing thought – TRB 2009 The major challenge facing the new

Secretary will be getting people to take transportation seriously—to recognize that the cost is not the benefit, and it is what happens after you build the road or the airport or transit system that matters to our future economic productivity and national well-being.”

Thank you

Alan E. Pisarski

alanpisarski@alanpisarski.com

Next Reauthorization (5) Commissions are for cover or

temporizing! Two commissions said the same thing

– more $$ needed Commission mandated by SAFTEA-LU

reported last month: need 10c for inflation and plan for

new non-petroleum based vehicle mileage tax

The Federal Highway Trust Fund becomes insolvent this year!

Next Reauthorization (5) Next week AASHTO will release its

Bottom Line estimates of investment needs for highways and transit on the hill (4th I have done)

State of play in national legislation – Context –

Difficult period – Economy, Policy Conflicts, New Admin. , etc.

Multiple transportation legislative issues Aviation Amtrak Rail freight Maritime

More temporizing actions likely

THE PRESENT LEGISLATIVE IMPASSE IS A SYMPTOM OF THE FUTURE!

PREMISES USER-PAY TRADITION AS GUIDE FUNDING INADEQUATE –IN 2 WAYS CONGRESS/ADMIN. RELUCTANT ON

FUEL USER FEES BOOST BUT NOT READY FOR THE NEXT STEP ADVENT OF “POST GAS-TAX ERA” SHIFT TO STATE AND LOCAL LEAD WANT/NEED PRIVATE & PUB/PRIV.

PARTICIPATION; BUT HOW?

As the Interstate Era Came to a Close No new vision emerged Nothing with the Interstate’s Power A Rich Funding System without a goal

1¢ = $1.7 Billion/yr RESULT

Lack of Focus Great Expansions of Eligibility A Grant Program Congressional “Earmarks”

Post-Interstate Era Legislation THREE 6 YEAR CYCLES

1992-ISTEA 1998-TEA-21 2005-SAFTEA-LU (2 years 11 extensions)

A new cycle begins this year Will the Congress continue to

temporize or will it launch a new era?THE POST POST INTERSTATE ERA!

CONTEXT has two elementsFINANCE

INADEQUATE FUNDING OF HIGHWAY NEEDS

FUEL EFFICIENCY SOME INFLATION NEW POWER

SOURCES

POLICY MANAGE SYSTEM USE “MARKET-

PLACE” USE PRIVATE

SECTOR USE ECONOMIC

CONCEPTS

Transport is most dependent on high energy density fuels “Cost effectiveness (cost per tonne of CO2) is the

fundamental determinant of which abatement policies to adopt and how much the transport sector should contribute towards economy-wide CO2 abatement goals --- it is important to achieve the required emissions reductions at the lowest overall cost to avoid damaging welfare and economic growth.”

“Transport and other sectors are expected to contribute less to overall emissions reduction strategies.”

ECMT Council of Ministers Transport and Environment ;Jun 2006

2828

U.S. Greenhouse Gas U.S. Greenhouse Gas EmissionsEmissions

Surface Transportation is the main issue for now

Rail, 43

Waterborne, 58

Air, 171

Heavy Vehicles, 350

Light Vehicles, 1113

Pipeline/Other, 47 Internat'l./Bunker, 84

U. S. Transportation Carbon Emissions by Mode, 2003 (Million metric tons CO2)

A little Perspective Here!How much are we really talking about?3.6% drop for year =

Last year I drove 300 miles a week [15,000 miles/yr]

This year I drove 290 miles a week

= 1 five mile trip lost per week

VMT trend is not just gas prices WEAK ECONOMY Discretionary trips in Vacation Season DEMOGRAPHY - a long term trend

VMT GROWTH RATE PER DECADE

0

1

2

3

4

5

6

1950's 1960's 1970's 1980's 1990's 2000's

perc

ent c

hang

e

IS FUEL CHEAP AT 4$?Cost/ gal

Fuel Efficiency

Cost/mile

1981 2007$

3.09 16.4 18.8 cents

2007 2.85 22.4 12.7 cents

2008approx.

4.00 23.7* 16.8 cents

PLUS WE ARE 20% RICHER THAN THEN!

Would 5$ or 6$ gas change America? LIFE STYLE PREFERENCES WILL DETERMINE

GOALS; AND TECHNOLOGY WILL RESPOND The consumer benefit of automobility is colossal

– think of toll costs = $4/gal Europe at $9/gal; still has traffic jams SERIOUS EFFECTS

slower access to automobility of minorities and lower income populations

Rural stress Less access to broader worker pool Depresses auto sales

FLEET TURNOVER RATE WILL BE KEY

THE GHG TRENDS ARE LARGELY POSITIVE CO2 Is Almost Self-stabilizing

Energy Intensity/GDP Declining about 2%/yr

Energy Intensity/Capita will decline .5%/yr

Transportation VMT Slow Growth Vehicle Fuel Efficiency Demography

Price Will Be Key Factor

Backgrounder #2Energy, Environment and Economy Institute of Transportation Engineers

Requested by ITE Board of Directors A WIN, WIN, WIN Opportunity Traced fuel issues and travel trends Its all about efficiency

VMT Trends US decline in VMT in 2008 about 3.6% Still low now that Economy is driver Rural areas hit hardest around 9%

WE SAW THIS BEFOREHistorical Passenger Car VMT

change 1974-1984

-5.00%-4.00%-3.00%-2.00%-1.00%0.00%1.00%2.00%3.00%4.00%5.00%

VMT trend is not just gas prices

NOW WEAK ECONOMY Discretionary trips in Vacation Season DEMOGRAPHY - a long term trend

VMT GROWTH RATE PER DECADE

0

1

2

3

4

5

6

1950's 1960's 1970's 1980's 1990's 2000's

perc

ent c

hang

e

A little Perspective Here!How much are we really talking about?3.6% drop for year =

Last year I drove 300 miles a week [15,000 miles/yr]

This year I drove 290 miles a week

= 1 five mile trip lost per week

VMT Response: Where did it go? TRIP CHAINING – Big

payoffs CARPOOLING

Work – some gains Non-work – more

CUTS IN TRIP LENGTH CUTS IN TRIPS MADE SHIFTS TO TRANSIT?

Maybe 2%

FREIGHT Local

Distribution opportunities

Load changes Big Fleet

gains

WAS FUEL CHEAP AT 4$?Cost/ gal

Fuel Efficiency Cost/mile

1981 2007$ 3.09 16.4 18.8 cents

2007 2.85 22.4 12.7 cents

2008approx.

4.00 23.7 16.8 cents

PLUS WE ARE/WERE 20% RICHER THAN THEN!

Would 5$ or 6$ gas change America? LIFE STYLE PREFERENCES WILL DETERMINE

GOALS; AND TECHNOLOGY WILL RESPOND The consumer benefit of automobility is colossal

– think of toll costs = $4/gal Europe at $9/gal; still has traffic jams SERIOUS EFFECTS

slower access to automobility of minorities and lower income populations

Rural stress Less access to broader worker pool Depresses auto sales

FLEET TURNOVER RATE WILL BE KEY

A Question!What Part Of Gains

In Air Quality In The Past 20 Years Have Come From:

Technology 95% to 105% Changed Behavior

+5% to -5%

What Part Of Gains In Green House Gases In The Next 20 Years Will Come From:

Technology? Changed

Behavior?

44

Potential impacts on new and existing transportation infrastructure?

Permanent inundation of roads, bridge approaches

Weakening of land, substructure supporting roads, bridges

Temporary flooding of roads Coastal Interior

Increased stream flow, erosion and bridge scour Pavement cracking, deformation;

King Gee, FHWA

REGULATION SAFETY of growing interest

Major decline last year; why? CAFÉ – raised standard from current

27.5 miles per gallon standard to 35.7 miles per gallon by 2015. light trucks, from 23.5 miles per gallon in 2010 to 28.6 miles per gallon in 2015

GHG – BIG ISSUE Cap and Trade – rebate or spend? Carbon Tax Air could catch brunt of plans after roads

TRANSPORTATION VS OTHER OPTIONS

Options for alternate fuels in other sectors are greater. MOST COST EFFECTIVE

Main focus is, and should be, electricity generation.

WHY IS TRANSPORTATION SINGLED OUT AS ONLY SECTOR TO HAVE OUTPUT CUT?

No one suggests farm output or industrial output should be cut by 25%