Senate Appropriations written record, fiscal 2008 passenger rail funding

Senate Appropriations written record, fiscal 2008 passenger rail funding

The National Association of Railroad Passengers strongly supports the Senate Budget Resolution level of $1.78 billion for Amtrak.  This includes $100 million—likely to be administered by the Federal Railroad Administration—for a federal matching program to support state corridor development work, and $50 million for station-related Americans with Disabilities Act work.

• This is the third straight year that an Amtrak board composed exclusively of President Bush’s appointees has supported significantly greater federal investment in the nation’s passenger train system than the Administration has requested.
• The Bush Administration, like Amtrak and our Association, supports a federal/state matching program for intercity passenger train service.  But we oppose the Administration’s proposal to fund this by taking it from Amtrak’s appropriation. 
• The Administration’s proposed budget of $800 million for Amtrak is unrealistic.  Not only would it make it impossible to implement the program the Administration proposed and funded for federal/state corridor development, but it likewise would make it impossible to continue existing services. 

I. There is a Strong Case for Growing the Nation’s Passenger Train System

The public wants more rail service, and is increasingly impatient with the extent to which federal transportation spending remains focused on highways and aviation, the least energy-efficient, most environmentally damaging forms of transportation (see section II), and the most costly.  Here are three omens worth noting:
• California A.B. 32 enacted last year imposes an economy-wide cap on greenhouse gas emissions, including from transportation, beginning in 2009. 

• The Institute for Public Policy Research, which Reuters characterized as “a leading British think tank,” urged requiring advertisements for flights or vacations that include flying to carry a tobacco-style health warning to remind people of the global warming crisis.  “The evidence that aviation damages the atmosphere is just as clear as the evidence that smoking kills,” said IPPR Climate Change Chief Simon Retallack. 

• The long-term trend in the price of oil is up.  “This year, the world is going to use about 86 million barrels of oil per day.  And if every oil well in the world were running, assuming 1.2% production growth, we are producing around 88 million barrels a day.  Reserves that we are putting on, in general, don’t produce as fast as the reserves we are replacing…[The economies of India or China] may slow, but from a double-digit level to something that is still very high…The chance of demand going down for energy is remote to none.” –John Segner, Portfolio Manager, AIM Energy Fund (interview in Barron’s, March 19, 2007).

Current U.S. reliance on air transport for mass travel may well not be sustainable.  We cannot assume the indefinite existence of “bargain” airlines or airfares, which depend heavily on cheap oil, given what we already know about oil supply and demand worldwide.

II. Energy Efficiency

The Transportation Energy Data Book, published annually by Oak Ridge National Laboratory under contract to the U.S. Department of Energy, shows that Amtrak is 18% more energy efficient per passenger-mile than scheduled airlines and 17% more efficient than automobiles (2003 data, the most recent reported; a passenger-mile is one passenger transported one mile).  These are actual figures based on total energy consumption by the systems, and load factors. 

General aviation (including corporate aircraft) is even less energy efficient.  Oak Ridge reports that general aviation was 2.6 times (162%) more energy intensive than certificated air carriers in 2001, the last year for which data are available; other modes are 2003 data:

British Thermal Units Per Passenger-Mile (lowest = most energy efficient)
Commuter Railroads:  2,751
Amtrak: 2,935
Automobile: 3,549
Certificated air carriers: 3,587
Light trucks (2-axle, 4-tire): 7,004
General aviation (2001): 10,384

Amtrak’s showing would be even more favorable with the benefit of adequate investment in rail infrastructure and rolling stock.  The results above compare highways and aviation which have benefited from decades of investment by all levels of government while Amtrak depends on a largely inadequate and outdated rail network that government has consistently ignored.  (We appreciate that the neglect would have been even worse but for the efforts of Congress.)

III. Route Cutting Is Not in the Public Interest

Pressure to downsize Amtrak’s already shrunken, minimal system even more is contrary to the public’s need for high quality mobility choices.  It is appropriate to increase the cost-effectiveness and on-time performance of the system, but further downsizing will not do this.  Efforts to increase service and expand the route network would drive economies of scale that would improve economic efficiency and better serve the public need for safe, reliable and energy efficient mobility.

None of the current routes is expendable. When considered in terms of the service Amtrak provides, the public makes heavy use of all existing routes; there are no “empty trains.”  The current trend is positive.  Travel on overnight trains as a group rose 3% in the first half of fiscal 2007 and yield (revenue per passenger-mile) climbed 4% compared with year-earlier figures.  Comparing the entire fiscal 2006 with fiscal 2005, yield jumped 10% while passenger-miles fell only 3% despite major service disruptions caused by Hurricane Katrina.  Amtrak is not “giving away the store.”  Congress’s oversight should focus on year-long averages and not get distracted by individual fares offered selectively on the internet. 

Attempts to improve economic efficiency by forcing removal of the “weakest routes” have not been effective in the past and likely will continue to fail in the future because of “network interdependencies” that affect both cost and revenue:
• A significant proportion of passengers on overnight national network routes connect with other Amtrak routes.  The elimination of one route takes revenue away from surviving routes;
• The elimination of one route doesn’t eliminate all of the costs allocated to it; many of those costs are just transferred to remaining routes. 
• Further tinkering with Amtrak’s current route structure risks great damage to the system’s usefulness to travelers both now and in the future, while doing little to reduce Amtrak’s operating grant requirement (and possibly increasing it). 

The purpose of identifying “weak” routes should be only to focus management’s attention on improving the attractiveness of the service and raising fare box recovery.

It is important to measure performance with metrics that are both accurate and appropriate. 
For example, Amtrak reports separate financial results for the Sunset Limited and Texas Eagle.  This creates the illusion that the Sunset has a loss per passenger mile nearly double that of the Eagle.  In reality, the Sunset and Eagle run as a single combined train San Antonio-Los Angeles; it is impossible to segregate the revenue and cost into two separate trains.  When treated as a single train, the “net cost” of operating Eagle/Sunset is in line with other overnight long distance routes.  Elimination of the Sunset would significantly increase the “net cost” of the Eagle, producing either much higher Eagle costs or much lower revenue, depending on whether or not Amtrak continued the San Antonio-Los Angeles segment.

“Subsidy per passenger” is not a standard measure for intercity travel because it ignores wide variations in trip lengths of different passengers.  Consequently, it is not an economic measure but a statement of prejudice against passengers taking long trips, and against rural America.  More reasonable measures include revenue-to-cost ratio, operating ratio (opposite of revenue-to-cost; frequently used in the railroad industry, loss per seat-mile and loss per passenger-mile.

No matter how many routes get cut, there always will be another set of “worst performing routes” that become the next targets for elimination.  The most effective strategy to improve Amtrak’s utility and economic efficiency is for Amtrak to focus on increasing volume and revenues, not reducing or eliminating service.

IV. Overnight Trains: A National Treasure

Here are some of the major reasons Congress should maintain and expand nationwide passenger train service.  An expanded national network will provide: 

1. Mobility for the one of every three Americans who does not drive.
2. Mobility for millions of Americans who cannot or do not want to fly, in major markets with affordable air fares and markets with little or no alternative public transportation. 
3. An essential link between underserved rural communities and metropolitan areas.
4. A foundation for future rail development that facilitates start-up of shorter-distance intercity services and commuter rail operations into congested urban areas—both of which use some of the same tracks and/or facilities.
5. The only intercity passenger train service for people in most states.  If all long-distance trains disappeared, the surviving system would serve just 21 states, and the network would consist of only four, isolated mini-networks.
6. Needed transportation capacity with minimum impact on the environment.  Except in a few key corridors already at capacity, rail can increase its capacity at comparatively low cost by increasing train length or running more trains on existing infrastructure.
7. Greater public safety; rail is far safer than highways.
8. Enhanced national security both by increasing the energy efficiency of the nation’s transportation system and by giving travelers needed choices in emergencies.
9. On many routes, the best way to see the nation’s natural beauty and the only practical way for those who can’t take long automobile trips.

V. Shorter Corridors

The need for these services is increasingly well understood, helped most recently by strong ridership response to the frequencies Illinois added last fall on the lines linking Chicago with St. Louis, Quincy and Carbondale.  For March, ridership on these lines was up 57%, 44% and 75%, respectively, over March, 2006.

States are eager to develop new passenger train services and will respond quickly when provided a federal matching fund program.  In some cases, like California, the need is for new equipment as ridership growth begins to exceed the capacity of available rolling stock.  In other states, the issue is adding new lines.  Thank you for considering our views.