Streetsblog Capitol Hill

Let’s get this straight: skyrocketing gas prices are inspiring people to investigate their transportation options. More and more of them are taking transit. Is this really the time to take the axe to those transit systems’ budgets?

When drivers switch to transit, they should be welcomed with on-time service and affordable fares that reinforce the wisdom of their decision. Instead, they’re finding that their bus routes are being cut, fares are going up, and they’re faced with longer waits for infrequent service.

Members of Congress are tripping all over themselves to pass bills to drill in the Arctic or repeal tax breaks for big oil (depending on their respective party ideology) – neither of which will have a measurable effect on gas prices. The Department of Justice is investigating to see if there’s been any fraud or manipulation in gas prices.

But has anyone in Washington thought to make sure people had alternatives so they didn’t have to spend so much on so much gasoline? That the simplest way to save households money might be to make sure they have reliable transit service?

As Ya-Ting Liu of the Tri-State Transportation Campaign notes in the TSTC blog, Mobilizing the Region:

Type in “transit ridership” in Google News and one will see reports of upticks in transit ridership across the country, from large cities to small towns (Pierce County, WA; Lake Tahoe, CA; Palm Beach, FL; Luzerne County, PA; Nashville, TN; Montrose, CO;Valparaiso, IN to name just a few).

Unfortunately for those turning to public transportation for a reprieve, they’re most likely experiencing a system that has been cut to the bone in the past 18 months as lawmakers in D.C. stood by. Not only did the 111th Congress fail to pass the Public Transportation Preservation Act of 2010, which would have provided emergency federal funds to restore and maintain transit service across the country, the 112th Congress has recently slashed transit funding as a way to curb federal spending. More could be on the way. The House Budget Committee recently passed Congressman Paul Ryan’s proposal for fiscal year 2012 that would slash federal transportation spending by 30%, bringing it from $50B/year to about $35B/year. According to an analysis conducted by House Transportation & Infrastructure Committee minority staff, the tri-state region would lose over $1 billion in federal transportation dollars and 38,515 jobs. [To see the damage in your state, check out the chart here [PDF].]

Only in planet D.C. can one be outraged about rising gas prices, non-responsive on rising transit ridership numbers and wholly committed to reducing federal investments in energy efficient modes of transportation like transit.

Democrats and Republicans are jockeying for the title of Gas Price Slasher, though neither party has a plan that has any potential to reduce prices. While Democrats propose cutting oil company subsidies, Rep. Doc Hastings (R-WA) has introduced three bills to expand oil drilling, saying that they’ll spur employment in the Gulf and reduce U.S. dependence on foreign oil.

The Natural Resources Defense Council’s David Goldston, in his excellent summary of the legislation on NRDC’s Switchboard blog, says these bills would “open almost all the waters of the U.S. to oil drilling; prevent any judgments from being made about where and when and how to drill; tie the hands of this and future administrations and the courts; and weaken the system of safety and environmental review. Quite a legacy.”

Congress hasn’t passed a single piece of legislation since the Deepwater Horizon disaster last April to make drilling safer. The House passed a safety bill (when it was still controlled by Democrats) but the Senate blocked it. If passed, these bills would be the first action Congress takes on drilling since the spill.

The three bills the Republicans are bringing to the floor – two of them as early as tomorrow – are:

• H.R. 1229, the Putting the Gulf of Mexico Back to Work Act, which would set a 30-day time limit for reviews of drilling permit applications, with automatic approval kicking in after 60 days
• H.R. 1230, the Restarting American Offshore Leasing Now Act, which would mandate that the government sell oil and gas drilling leases in the next year for the central and western Gulf of Mexico and off the coast of Virginia – areas the administration decided not to lease after the Gulf oil spill last year. The bill also blocks court review of controversial environmental impact statements done before the spill.
• H.R. 1231, the Reversing President Obama’s Offshore Moratorium Act, is by far the most controversial (and has such a partisan name it virtually guarantees that no Democrats will vote for it). It would mandate that at least half the unleased area off the East Coast, the Southern California coast, the Arctic Ocean and Alaska’s Bristol Bay be put up for lease sales every five years until there’s nothing left to lease. Most troubling, future administrations could not reconsider or change this mandate, even in the event of a spill, or economic damage to tourism or another industry, or because there was no capacity to handle a potential emergency.

“This is replacing oil policy with a kind of oil mania,” wrote Goldston. It’s as if Hastings set out to prove just how addicted the country is to oil, he went on: “Under these bills, the U.S. would truly be acting like an addict, willing to sell out any principle, dispense with any caution, endanger any asset to get its next fix.”

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American households will spend more money on gasoline this year, in dollar and inflation-adjusted terms, than ever before. And middle-class Americans are more concerned about fuel prices than at any time in recent history.

These are the findings of a poll of 1,000 Americans commissioned by the Consumer Federation of America, which has been tracking national attitudes toward fuel economy and oil consumption for six years.

Fueling up in 2011 will cost the average household about $2,800, or about the amount they spend on health care, the organization reports. They’re predicting gas prices to rise to an average of $3.56 per gallon this year, but CFA Research Director Mark Cooper said that projection “may ultimately prove to be low.”

That will squeeze American households that are still struggling with the effects of the recession.

A record 79 percent of those surveyed said they are “greatly concerned” about fuel prices, including 84 percent of middle-class Americans whose household income is between $25-75,000.

“Gasoline prices have become a middle-class issue,” said Cooper. “Obviously in Washington that is a big deal. It really does change the terrain of policy making.”

This was the first time since CFA began exploring this topic that middle-class Americans were the group most concerned about fuel prices — a fact CFA officials hope will embolden lawmakers toward reform.

The findings will be presented tomorrow to the House Energy and Commerce Committee, where CFA will use the information to argue for increased fuel efficiency standards. The study found that, by a 2-1 margin, Americans support raising fuel efficiency standards to 60 miles per gallon by 2025.

But fuel efficiency isn’t the whole story. The American Public Transportation Association recently reported that people can save an average of $825 a month by taking transit instead of driving, given today’s gas prices.

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Average gas prices are expected to hit $2.92 during this summer's peak driving season, with fossil-fuel consumption rising overall as the economy begins to recover from a recession that limited U.S. emissions growth, according to a forecast released this week by the federal Energy Information Administration (EIA).

The EIA's latest short-term fuels outlook stopped short of predicting the return of the $4-per-gallon gas prices seen in the summer of 2008, which gave new political momentum for alternative energy expansion -- though some financial analysts are still betting that fuel costs will rise significantly this year.

The EIA also projected that total emissions from Americans' fossil-fuel use would start to rise after falling by 6.6 percent last year, with a 2.1 percent increase predicted in 2010 and a 1.1 percent increase in 2011. U.S. emissions first began falling in 2008 as the global financial crisis took hold; conversely, the EIA said a future return to rising emissions would be driven by "economic growth."

But what future growth won't do, according to the federal government's energy crystal ball, is power a sizable new uptick in summer gasoline use. From the EIA report:

During this summer season, projected motor gasoline consumption increases by 0.5 percent over last summer, substantially lower than the 0.8 percent growth rate recorded last summer. Gasoline consumption last summer was stimulated by both the beginning of economic recovery and a $1.37 per gallon decline in gasoline prices from the previous year.

Another reason for the increase in fuel consumption last summer, per the EIA, was the downturn in transit ridership -- suggesting that local service cuts or fare hikes may have helped push travelers into their cars.

If the EIA's prediction holds true, Democrats may not be able to make as much political hay of high fuel prices as they attempt to pass a climate change bill during the summer. White House press secretary Robert Gibbs told reporters last month that "my guess is there will be a clamoring for an energy bill when gas prices go up, as they normally do, as we get closer to more driving as we get closer to the summer.”

Early this week, I noticed a number of my favorite bloggers linking to this Elisabeth Rosenthal essay at Environment 360, on the mysterious greenness of European nations. The average American, as it happens, produces about twice as much carbon dioxide each year as your typical resident of Western Europe.

Rosenthal attributes much of this difference to behavioral factors relating, it seems, to Europeans' unique tolerance of inconvenience. She writes:

But even as an American, if you go live in a nice apartment in Rome, as I did a few years back, your carbon footprint effortlessly plummets. It’s not that the Italians care more about the environment; I’d say they don’t. But the normal Italian poshy apartment in Rome doesn’t have a clothes dryer or an air conditioner or microwave or limitless hot water. The heat doesn’t turn on each fall until you’ve spent a couple of chilly weeks living in sweaters. The fridge is tiny. The average car is small. The Fiat 500 gets twice as much gas mileage as any hybrid SUV. And it’s not considered suffering. It’s living the dolce vita.

She later adds:

Also, in Europe, the construction of most cities preceded the invention of cars. The centuries-old streets in London or Barcelona or Rome simply can’t accommodate much traffic — it’s really a pain, but you learn to live with it. In contrast, most American cities, think Atlanta and Dallas, were designed for people with wheels.

What makes this particularly remarkable is that she opens the essay by discussing an experience she has in Stockholm, in which she insists on taking a taxi from the airport, which ends up being much slower and more expensive than the train.

Brad Plumer frames the piece as a fascinating read in light of the "lifestyle taboo," writing:

It's not considered the height of political savvy here in the United States to point out that European lifestyles are greener than our own. Don't expect that line in an Obama speech anytime soon. Too many facets of European life—the cramped apartments, the clotheslines for drying laundry—would likely strike suburbanites as inconvenient, burdensome, or even downright primitive...

Rosenthal wonders whether similar measures could fly in the United States: "I believe most people are pretty adaptable and that some of the necessary shifts in lifestyle are about changing habits, not giving up comfort or convenience." Maybe so, but this sort of talk still tends to be taboo in mainstream U.S. green circles. Josh Patashnik wrote a terrific piece for TNR last year on Arnold Schwarzenegger's brand of "pain-free environmentalism" in California—it's all just peachy to talk about swapping out coal-fired plants for solar-thermal stations, but ixnay on trying to rein in suburban growth or coax people into smaller homes.

I see several problems with Rosenthal's essay and with Brad's framing of it. One is that it's not really correct to attribute the huge gap in per capita emissions between America and Western Europe to the charming European habit of drying their clothes on clotheslines.

As Brad notes, power sources play a major role, whether one is talking about greater use of natural gas, the French nuclear industry, or Iceland's geothermal capacity.

Climate is extremely important. Western Europe is fairly temperate relative to much of America (and especially compared to the dirtiest parts of the country). In the same way, Californians are much greener than Texans, thanks to the moderate conditions along the heavily populated Pacific coast, which reduce the number of days on which home heating or cooling is needed.

But there are lifestyle issues involved, particularly where transportation and land use are concerned. Read more...

On Monday, Elana Schor highlighted a recent column from occasionally right New York Times columnist Tom Friedman, who once again rolled out one of his favorite policy prescriptions -- an increased gas tax. Friedman wrote:

Tom Friedman (Photo: IvyGate)

According to the energy economist Phil Verleger, a $1 tax on gasoline and diesel fuel would raise about $140 billion a year. If I had that money, I’d devote 45 cents of each dollar to pay down the deficit and satisfy the debt hawks, 45 cents to pay for new health care and 10 cents to cushion the burden of such a tax on the poor and on those who need to drive long distances. 

The first and most obvious thing to point out is that it's far more likely that Tom Friedman's mustache will be elected president than it is that Congress will approve a five-fold increase in the federal gas tax, even one phased in over a decade or more.

There is a reason that gas taxes have not been increased in 15 years: expensive gasoline in America is incredibly politically unpopular, and not without reason. Increases in gasoline prices are painful for American households, precisely because the nation is so dependent on driving.

That's the tricky part. Prices need to be higher to reduce dependence on gasoline, but that very dependence makes price increases political suicide. What is needed is either an extremely gradual increase in gas taxes (on the order of the rate of inflation plus 1 percent per year), or increases in market prices (for which politicians will still be blamed), or an indirect levy of some kind that will act to reduce consumption.

A second point is that a $1 per gallon tax on gasoline and diesel fuel won't raise $140 billion a year for very long. Why? Because consumers respond to price shifts, and they respond a lot to large price shifts.

In 2007, the average, inflation-adjusted price of a barrel of oil was about $67 per barrel, and Americans consumed about 20.7 million barrels of oil per day. In 2008, the price of oil averaged about $91 per barrel (which translates into a gas price increase of about 60 cents per gallon), and consumption fell by more than 1 million barrels per day, to the lowest level since 1998.

The price goes up and consumption goes down, reducing the revenue one earns from the increase in price. What's more, the short-run demand response will often be mild relative to the long-run response.

Faced with an increase in the price of gas, households can't do all that much in the short term to respond. They may cut out unnecessary errands, or carpool, and if they live in an area with good transit access, they'll likely increase transit ridership.

But because of the household location decisions made in recent decades, most households will have few ways to reduce gasoline usage immediately. Consumption will fall, but not by much.

If months pass and the increase persists, then responses will grow more dramatic. Households will trade in gas-guzzlers for more efficient vehicles or buy bicycles. Consumption declines will increase.

And if increases are expected to be permanent, the long-run responses will be significant. Households may begin to choose home or job locations that minimize driving or that allow for use of transit, walking, or biking. Communities may begin designing themselves differently and increasing transit service.

And ultimately, consumption may fall to near zero.

That doesn't mean that driving will fall to zero. Read more...

We tend to have a few good laughs when Randal O'Toole fires up his Cato computer and weighs in on transportation issues. It's hard to take seriously a man who thinks that having the government tax people to build something which it then gives away for free is the libertarian ideal.

But occasionally O'Toole provides an opportunity to discuss some interesting aspects of the transportation planning process and learn from his errors. And so we turn to his latest policy paper, which was released yesterday. Therein, he writes:

The Interstate Highway System accomplished all of this [construction of the system] without any subsidies. Federal highway user fees paid for 90 percent of the cost of the system, and state highway user fees covered virtually all of the remaining 10 percent.

This brings up an interesting question: What is a user fee? Common sense would suggest that a user fee is a fee paid by a user of something in order to use that something. A common example might be a train fare. When one wants to ride a train, one purchases a ticket. One doesn't purchase a ticket if one doesn't want to ride the train, and one doesn't ride the train without a ticket. A ticket is specifically meant to extract a fee from a potential user, that that user might then be allowed to use the train.

So do gas taxes count as highway user fees? Well, one might pay gas taxes even if one never uses highways. You pay the gas tax on gas used to drive down local roads or private driveways, or to power lawnmowers and tractors that never even see publicly-funded blacktop.

And one can use highways without ever paying gas taxes. Anyone able to obtain a vehicle powered by natural gas or electric batteries or canola oil can ride on the federal highway system for thousands of miles and never pay one cent to do so.

So gas taxes are not user fees. Indeed, the lack of actual user fees is one reason American highways suffer from severe congestion problems; when you give away something valuable for free -- like scarce highway space -- it ends up seriously over-consumed.

As a thought experiment, let's consider a world in which federal gas taxes functioned more like a user fee. That is, let's imagine that when drivers fill up, they pay a federal gas tax only on the gasoline consumed while driving on federal highways. That's still not really a user fee, but it's a little closer.

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Ed Glaeser is a very good economist, and his papers are indispensable reading for those interested in the workings of urban areas. But he is also a strident conservative, whose popular writings frequently challenge conventional progressive wisdom (and my own views).

I was interested, then, to read that he would be writing a three-part examination of the economics of high-speed rail (HSR) at the New York Times' Economix blog. I understood that Glaeser would not approach rail from a position of overwhelming support, but I imagined he would provide a fair and rigorous analysis, worth taking seriously.

I hate to pass judgment just one part into the three part series, but so far his effort is highly disappointing.

Let's begin with the first and most obvious complaint -- Glaeser chooses to examine a potential link between Dallas and Houston.

This strikes me as a worthwhile link to have, but it is is notably not part of the administration's announced plan for a first go at construction of HSR systems around the United States. And it is manifestly not one of the top priority corridors for creation of true HSR, running at speeds of at least 150 miles per hour.

Why would he choose this corridor to examine? Why not begin with the most natural place to construct true HSR -- the Northeastern Corridor -- or the state moving fastest toward building its own true HSR network -- California?

Well, Glaeser was able to use Dallas' low share of commuters taking transit to knock the corridor's estimated ridership down by half. Transit's share of commuting in Los Angeles is nearly three times that in Dallas. In San Francisco, transit's share, at 32.2 percent, is more than seven times larger than in Dallas. Presumably this difference had something to do with his choice.

This is a bad beginning for Glaeser, but it actually gets worse. He presents a formula for determining whether the direct benefits of rail are worth the costs:

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The release of the Department of Energy's Transportation Energy Data Book is a transportation stat geek's dream -- 300-plus pages of numbers detailing the way the country burns this or that moving people and freight from city to city.

Of course, not everyone gets a thrill from poring through data tables for hours at a time, so for your convenience, here is the dime summary of the 2009 version of the publication: Americans still burn a lot of gas.

As of 2007, Americans used 19.4 million barrels of oil per day, or about one-quarter of global consumption. About 68 percent of petroleum consumption goes to transportation -- a number that has risen steadily for decades -- and about 84 percent of petroleum consumed by transportation is attributable to the use of American highways.

Our vehicles are getting more efficient, however. From 1970 to now, fuel efficiency for cars has increased from 13.5 miles per gallon to 22.5. For trucks, the number has risen from 10 mpg to 18.

The bad news is that from 1975 to the present, the SUV market share rose from 1.8 percent to 30.7 percent. And all of that driving has a significant cost in terms of carbon emissions.

Americans produce about 6 billion metric tons of carbon dioxide per year. Around a third of that -- 33.6 percent -- is from the transportation sector. Transportation's share of total emissions has been increasing in recent years.

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To be effective, fiscal stimulus must be timely.

The idea behind the policy is that in recession, households and businesses have an excess demand for savings -- everyone decides that they want to save at the same time, with nasty effects -- and so by borrowing those savings and spending them, the federal government can reduce the impact of the recession.

If the intervention isn't timed well, however, fiscal stimulus can backfire. If it takes too long to mobilize the policy, then the government will be borrowing and spending as recovery takes place, while households and businesses also want to be borrowing and spending.

The result is higher interest rates and bad investments and an overheating economy that's more likely to crash into another serious recession.

So it's not surprising that the government sought to spend as much as possible in as short a time as possible, and it's also not surprising that the relative rush led to investment in some projects that weren't necessarily ideal.

For instance, and as Elana Schor points out, it seems that $6.6 billion of the flexible transportation money sent to states under the stimulus has been allocated toward construction of new road capacity.

This is unfortunate. Read more...