Monthly Archives

May 2005

Commentary

Trains and Gasoline

by Noel T. Braymer, RailPAC President — When Amtrak was created in 1971 it was supposed to be a two year “experiment.” So uncertain was Amtrak’s future that one of the few capital expenditures at that time was for some new freight locomotives modified for passenger service. They could be sold easily to the railroads should the company be liquidated. The plan was that Amtrak would automatically go out of business if it wasn’t “profitable” in two years. Many people felt Amtrak was set up to fail, so responsibility for rail passenger service could be lifted from both the government and the railroads.

When the two year deadline for Amtrak arrived in 1973, it came during the first major gasoline crisis. In 1973 the Organization of Petroleum Exporting Countries (OPEC) froze exports of oil to the United States. This was done largely to raise the price of oil for oil producing countries, and to protest American support of Israel in the 1973 Egyptian-Israeli war. Before 1970 the United States didn’t need imported oil. In 1973 the United States still produced most of its oil. Today we import over half our oil, and this percentage will continue to rise. The disruption of supplies and increase of oil prices caused long lines for gasoline and panic across America. In 1973 the last thing anyone wanted to do was eliminate intercity rail passenger service.

Amtrak survived, but hardly thrived. In 1979 an attempt was made by the Carter Administration to drastically cut back Amtrak’s route system in the mistaken belief this would save money. At the same time the Shah of Iran was overthrown by a Revolution led by militant Islamic clerics. Again came long gasoline lines and higher gasoline prices; and less of Amtrak was cut back than originally proposed.

Since 1980 things have largely drifted along both for Amtrak and America’s “energy policy.” Politically, Amtrak was too hot a potato to “eliminate.” But, ridership and service at best stagnated except for some local state-supported services in places like California and Washington State. In the 1970’s there was also talk of American “Energy Independence” to replace imported oil. These projects largely died off. Through a combination of American diplomacy , military action and market forces the price of oil has been stable for the last 25 years. Oil producing countries discovered that higher oil prices created inflation, which in turn eroded most of their increased oil profits which of course are paid in U.S. dollars.

The current hike in the price of gasoline will moderate once demand is reduced. Unfortunately, as in the past this will be the result of a recession caused by high fuel prices. Oil supplies would be helped if the second largest oil producer, Iraq, was pumping oil at its full potential. But this is not a long term solution. The future promises declining oil reserves world-wide and greater demand for energy. Alternative energy solutions are at best years in the future before having a major affect. What can be done in the short run and long run is to conserve energy. This means more efficient lighting, insulation, less driving, more efficient cars, increased public transportation and of course more rail service.

There are powerful vested interests which makes change difficult. But there are also factors building like an earthquake, which will force many changes on the United States. The United States has a huge balance of payments deficit. In other words we owe the world a lot of money. We owe most of this money to Saudi Arabia for Oil imports and China for imports of almost everything else. China is now the second largest consumer of oil after the United States. Most of the oil producing counties which we have hostile relations are important oil suppliers to China. Any action against these counties would not be seen in China’s interest. If China wants to, it can call in the money we owe her. This would force major increases in the prime rate and greatly increase interest rates on everything, particularly those very low variable rates for new homes requiring long car commutes. We need as a country to go on a low oil diet.

Commentary

Amtrak 1999 and Acela R.I.P. ?

by Noel T. Braymer, RailPAC President — “We know we have a product here that will absolutely knock the socks off the competition,” said Amtrak President George Warrington. “Only Amtrak’s Acela will provide a very special journey for customers who will travel downtown to downtown. Fares will be about 20% higher than the current Metroliners but 25% less than air. Amtrak is hoping Acela will boost its market share in the NEC from 12% to 15% and will lead to way toward profitability by 2002.” “Acela’s entry into the Northeast creates the first of many high-speed corridors Amtrak has staked out nationwide,” said Chairman of Amtrak’s Board of Directors, Wisconsin Governor Tommy Thompson. “We are committed to developing high-speed corridors across America that connect communities, create jobs, boost local and regional economies, and make rail a fast, high-quality way for Americans to travel.” Vice-Chairman, former Massachusetts Governor Michael Dukakis explained that “the successful launch of high-speed rail later this year will enable Amtrak to achieve its business goal of contributing $180m in revenue growth, once in full service … Acela is on track to meeting this commitment, and also as serving as a model for the rest of the nation.”

Since the introduction of Acela service, the subsidy needs for Amtrak have more than doubled while long distance train service have seen cut backs. Acela hasn’t stopped Southwest or Jet Blue from entering the NEC market.

On April 15th, 2005, the FRA suspended all Acela service when cracks were discovered in 300 out of 1440 disk brake rotors of the 20 Acela trainsets. There has been no word how long this problem has been brewing. Amtrak tried to cannibalize parts to get two trainsets running by Monday April 18th so one Acela train could run. After one trip it was found the repairs weren’t successful. Now all Acela service is canceled until further notice. (The new Spring-Summer NEC schedules show Acela Express High Speed Train Equipment will be out of service until late summer or early Fall to repair brake problems. -Ed.) Bombardier, responsible for building the Acela, only has 80 of the 300 rotors needed for repairs. These rotors were made only for the Acela and are no longer in production. It will be summer before Amtrak hopes to restart service.

This is yet another problem for the Acela which has had problems almost from inception. Originally the Acela was suppose to provide service between New York and Boston in under three hours as well as provide faster New York-Washington service. The use of tilt train technology to allow faster speeds around curves would make this possible. In the development phase Bombardier got permission from Amtrak to use an existing Bombardier car shell also used with the Montreal commuter trains. It was discovered after construction began that this car shell was 4 inches to wide to allow the full tilt capability needed to reach the running times expected of the Acela. The Acela was a year late from its proposed start up. Early service was marred with numerous “bugs” including bathroom doors that didn’t work and software problems which caused equipment shutdowns. To start up the Acela service Amtrak management borrowed heavily. So much so that it had to mortgage Penn Station in New York just for cash to keep Amtrak operating. (Amtrak’s 2005 debt by their own admission is now $3.8 billion -Ed.)

Acela finally started service on December 11, 2000. Problems continued to plague the train. Despite goals of better than 90% on time performance, the Acela usually runs in the 70% range along with the rest of Amtrak’s NEC trains. Then in August of 2002 Acela was canceled for three weeks because of cracks in the bracket holding the yaw damper. A yaw damper is like sideways shock absorber. It was added to the Acela locomotive trucks because it was discovered that at high speeds the trucks “hunted.” That means the trucks violently rocked side to side. The cause of this “hunting” was never found, but the yaw dampers were installed to help reduce the “hunting.” The tendency to “hunt” put so much stress on the brackets holding the yaw dampers, that this apparently cause the cracking. The welds on the brackets were reinforced and the trains put back in service.

One of the criticisms of the way Amtrak bought the Acela, was that it did not buy “off the shelf.” Buying “off the shelf” means buying something in production and well tested with the “bugs” well worked out. There were manufactures bidding for this contract that had successfully built high speed tilt trains. Amtrak choose Bombardier which hadn’t. Why? Perhaps it was because Bombardier was able to offer financing, thanks to the Canadian government. Bombardier built the Acela with parts from other trains. Many parts came from the French TGV, which is a good product. The difference is in meeting American crash standards the Acela ended up weighing twice as much as the TGV. There has been speculation this may be a factor in the truck “hunting” and in the cracks now in the disk rotors. The rotors where expected to last one million miles, they failed half way to that standard.

All these problems have happened while the equipment was still under warranty, including this latest problem with the brakes. The warranty ends next year. What will break down next?