High Speed Rail: Benefits, Costs, and Challenges

The definition of high speed rail is relative and varies from country to country. The U.S. Federal Railroad Administration uses a speed of 110 miles per hour as the threshold for its minimum high speed designation. Speed improvements in conventional rail service, however, are an important element and often an interim step toward building a faster rail network. State transportation agencies have developed and are developing numerous studies and plans to advance both “higher” and true “high” speed rail service within their borders—with the support of more than $10 billion in appropriated and budgeted federal funds. However, these plans face significant technical, financial, and policy challenges. Efficient use of both public and private investments will require careful analysis of potential economic costs and benefits, mechanisms to finance and capture the economic value of public investments, and coordination with other transportation, land use, and economic development plans and goals.

 

Related Media Coverage

On May 4, 2010, the Environmental and Energy Study Institute (EESI) and the American Public Transportation Association (APTA) held a briefing on the economic, transportation, energy, and environmental issues associated with investments to increase the speed of U.S. passenger rail service. Proposed “high speed” rail projects have the potential to reduce transportation costs, cut oil use, relieve highway and air traffic congestion, enhance other forms of public transportation, increase land values, and spur economic development in large and small communities. However, how projects are planned and where investments are targeted will be critical to the cost-effectiveness and long-term success of a national high speed rail network. This briefing explored the potential benefits and costs of high speed rail investments, key challenges that need to be addressed, and how different states are developing higher speed rail service.

• Don Lund: Beware failure to control public spending by Don Lund, Wisconsin State Journal

• Many factors are converging to make high speed rail more attractive and feasible in the United States, including advances in rail technology, increasing fuel price trends, increased highway and air traffic congestion, increased demand for non-automobile travel options, heightened focus on potential energy and environmental benefits, and potential safety benefits (reduced fatalities and injuries).
• Economic analysis provides important guidance regarding how an interconnected passenger rail network could be cost-effectively developed over time. Initially, higher speed rail would develop in limited corridors. Later, hub and spoke networks connecting major metro areas along the West Coast and in the eastern half of the nation would be economically feasible. Eventually, it would make economic sense to link these regional networks into a national network.
• For trips between 100 and 600 miles, there is an “efficiency gap” for automobile and air travel in terms of cost, energy, and greenhouse gas emissions. High speed rail would much more efficient and economic for these trips, yielding substantial cost, fuel, and time savings. High speed rail is particularly cost-effective under scenarios where oil prices remain at or above current levels.
• The most economic target speed for rail service can vary from place to place, and may change over time for a given corridor. For many places, incremental improvements and moderate travel speeds make the most sense in the near term. Competitive travel times and reliability are often more important than maximum speeds.
• Certain economic benefits, such as increased real estate investment and shifts from other travel modes, accrue only at certain speed/travel time thresholds. In certain corridors, consequently, there are strong arguments to invest in larger and more rapid increases in average travel speeds.
• Total per mile costs of providing rail service increase significantly with increases in travel speed, but ridership also increases with faster speeds, albeit less dramatically. Hence, there is a “sweet spot” where ridership and costs are optimized. This sweet spot also varies from corridor to corridor.
• The feasibility and benefits of higher and high speed rail investments depend primarily on ridership. Therefore, it is important to focus initially on connecting major mega-regions with proven demand.
• Certain metropolitan regions are more conducive to high speed rail by virtue of existing land use patterns and complementary public transportation service.
• High speed rail is not an economic development tool by itself, but it can activate economic development potential in numerous ways: saving time and money; expanding labor markets for employers and expanding employment opportunities for labor force; enhancing “clusters” of economic activity across regions; and creating a focal point for future development including potentially transformative benefits to cities and towns.
• It is important to provide rail service where people and economic activity are already concentrated, but it is also important to plan ahead for growing cities and regions. North Carolina, for example, completed acquisition of rights-of-way for its rail corridor in 1997, well ahead of the recent renewed interest in high speed rail.