House Appropriations written record, fiscal 2008 passenger rail funding

House Appropriations written record, fiscal 2008 passenger rail funding

Statement of

Ross B. Capon, Executive Director

National Association of Railroad Passengers

Submitted to the

Subcommittee on Transportation, Housing and Urban Development, and Related Agencies

The Honorable John Olver, Chairman

Committee on Appropriations, U.S. House of Representatives

Fiscal 2008 Amtrak Funding
April 17, 2007

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The National Association of Railroad Passengers strongly supports Amtrak’s FY 2008 Grant Request of $1.68 billion.  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.  It is important to note that:

• 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, supports the creation of a federal/state matching program for intercity passenger train service.
 
• We strongly oppose the Administration’s proposal to fund this program 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.  Or, to use Alex Kummant’s diplomatic words before your subcommittee, “It really would be very difficult to keep it [Amtrak] running.”

I. There is a Strong Case for Rail Passenger Growth

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 will set limits on greenhouse gas emissions from all activities including transportation beginning in 2009. This approach departs from most previous efforts worldwide, which have focused on electric power plants.
• 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 trend on oil prices 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 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 actual 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. 

Oak Ridge’s actual figures (British Thermal Units per passenger-mile—lower number means greater efficiency) are:

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	10,384*

(*General aviation is for 2001; other modes are 2003.)

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 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.  On the other hand, efforts to 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 current routes; there are no “empty trains.”  Current trends are positive.  On the overnight trains as a group, travel (passenger-miles) for the first half of fiscal 2007 is up 3% and yield (revenue per passenger-mile) is up 4% compared with the same months of fiscal 2006.  Comparing the entire fiscal 2006 with fiscal 2005 shows a 3% drop in passenger-miles (largely Katrina-related, temporary service shutdowns) but a 10% increase in yield.  Clearly, Amtrak is not “giving away the store.”  Congress’s oversight focus should be on year-long averages, not individual fares offered selectively on the internet. 

Attempts to improve economic efficiency by forcing removal of the “weakest routes” likely will fail, due to critical “network factors” that affect both cost and revenue:

• A significant proportion of passengers on the overnight trains connect with other Amtrak trains.  The elimination of one train takes revenue away from surviving trains;
• The elimination of one route doesn’t eliminate all of the costs assigned to it; many of those costs are reallocated to surviving 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). 

Thus, while it is appropriate for management to identify “weakest routes” to see what can be done to improve them, it is important that accurate metrics be used, and that the goal is improvement of routes, not their elimination. 

Using the metrics in the amendment Rep. Pete Sessions (R-TX) offered to H.R. 1401 (the rail and public transit security bill) and adjusting Amtrak’s statistics to properly credit the Sunset Limited with the support it provides for the Texas Eagle, the performance gap among all the long-distance routes is small.  It presumably is getting even smaller as the Sunset’s recovery parallels the recovery of New Orleans—for the first half of fiscal 2007, Sunset passenger-miles are up 43% and the yield is up 7%.

[The Sunset conveys Texas Eagle cars between San Antonio and Los Angeles; elimination of the Sunset would result in assignment of much higher costs to—or a severe loss of revenue from—the Eagle, depending on whether or not San Antonio-Los Angeles service continued.  The Sessions amendment referred to “cost per seat-mile” but presumably meant “loss per seat-mile,” the metric used in the referenced Amtrak report.  This report shows that 11 of the 15 overnight trains rank closely together—ranging from Cardinal 16.3 cents to California Zephyr 9.6 cents—with no gap greater than 1.2 cents a mile.  This report also shows the Sunset with a conspicuous 25.5 cents, but—if the Eagle and Sunset were combined—the result would be in or close to the aforementioned group of 11 trains.]

The most effective strategy to improve the economic efficiency of all of its routes is to focus on actions that increase volume and revenue, not reduce or eliminate service.

Past actions that cut service and routes often resulted in revenues falling faster than costs.  We should learn from history: eliminating what some perceive as the “weakest” routes doesn’t produce much if any savings.  In addition, 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 result of such unproductive actions is what we have today—a shrunken system that no longer serves all of the nation’s major metropolitan areas and heavily traveled routes.

IV. Overnight Trains A National Treasure

Here are the major reasons for the importance of Amtrak’s national network trains (points 6-8 apply to all types of Amtrak routes):

1. A transportation choice for millions of people annually, both those who do not want to fly or drive or who cannot; both those in major markets with affordable air fares and those in markets with little or no alternative public transportation. 
2. Providing an important transportation link for many underserved rural communities and regions across the country.
3. Serving as a foundation of a future rail development program—facilitating the start-up of shorter-distance intercity services and commuter rail operations which require some of the same tracks and/or facilities.
4. On many routes, the best way to see the nation’s natural beauty; the only practical way for those who can’t take long automobile trips.
5. In many states, the only intercity passenger rail service. (If all long-distance trains disappeared, the surviving system would serve just 21 states, and the network would consist of four, isolated mini-networks.)
6. Providing needed transportation capacity with minimum impact on the environment.  Except in a few key corridors already at capacity, rail can increase its capacity through-put with relative ease, by increasing train length or running more trains on existing infrastructure.
7. The safest mode of transportation in bad weather, and often the most reliable.
8. Trains enhance national security both by giving passengers another travel option—most dramatically illustrated immediately after 9/11—and by reducing the nation’s energy dependence.

V. Shorter Corridors

Fortunately, the need for these services is increasingly well understood, helped along 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.

States are anxious to get moving, based on a federal matching fund program.  In some cases, including California, the need for new equipment is desperate as ridership growth moves towards outstripping available rolling stock.  In other states, the issue is adding new lines.

Thank you for considering our views.  We stand ready to help the subcommittee as we are able, including by providing such further information as you may request.

About NARP

The National Association of Railroad Passengers is the only national organization speaking for the users of passenger trains and rail transit. We have worked since 1967 to expand the quality and quantity of passenger rail in the U.S. Our mission is to work towards a modern, customer-focused national passenger train network that provides a travel choice Americans want. Our work is supported by over 22,000 individual members.