Energy Policy, Foreign Oil and Transportation

One of the things missing from most conversations regarding energy (independence) and environmental policy is transportation policy. There are no real solutions to the problems of foreign oil and global warming without including the who, what, when, where and how of transportation. The first real foray into combining transportation with energy and environmental policy may have come from Mr. T. Boone Pickens. The Pickens Plan includes compressed natural gas for automobiles and wind turbines for power production. He takes the natural gas used for power generation and replaces it with wind. He uses the natural gas from power generation in a compressed form to power automobiles. His plan is a good start. However, if we also closely examine trucking, rail and other modal approaches, we might be able to actually end our dependence on foreign oil while decreasing our national carbon footprint.

Since the national interstate system was begun in the 1950’s by President Eisenhower, trucking has been on the rise. Tractor trailer vehicles opened a new option to commerce. For the first time, a tomato could be picked in California and be on a shelf in Alabama the next day. At the time, rail was not efficient enough to compete with the tempo of truck delivery. Today, rail carriers can compete on speed utilizing multi-modal systems. A multi-modal or piggyback system consists of a container that can have wheels like a truck or mounted with no wheels on a rail car. These containers are also stacked on ships. This system allows rail carriers to go from ship to rail to highway without missing a beat. For example, containers may be off loaded from a ship in San Diego, mounted on a railcar to Memphis, clearing customs in Memphis and finally mounted on wheels and delivered to a market in Collierville. Collierville is a suburb of Memphis, Tennessee. The problem arises when the container is destined from Memphis to Mobile, Alabama.

See, Mobile is served by several rail yards much closer than Memphis. To be sure, some of those rail yards do not offer customs clearance. However, customs clearance could either be established or completed at the port of entry. The real question becomes why a truck is used when rail is less expensive per mile and has a smaller carbon footprint. Actually, rail is considerably less expensive. This is so because the trucking industry is subsidized. Yup, you pay for most of the cost of those bananas you bought at the market in your gas tax. See, a tractor trailer does 16,000 times more damage than your Ford Expedition to a road. But, trucking only pays a pittance toward the cost of the repair of roads in gas tax. Said another way, with a gasoline tax of 37 cents per gallon, a truck would have to pay about four million dollars per year in taxes to be taxed equally*. We might decide the local apples are a better deal than the bananas if we had better price signals.

Since the price signals are so skewed toward trucking in the United States, we have made bad decisions regarding spending on infrastructure. Citizens have rebelled against higher gas taxes. Some of this is due to the extraordinary price of gas. But, due to those inaccurate price signals, people have determined congestion relief is not affordable. Depending on where you live, you might spend three or more hours per day in traffic. This time represents lost productivity, more carbon and most of all zero miles per gallon. Better and less congested roads can not be reconciled by the public in the face of trucking subsidies and high gas prices.

Energy policy is more complicated than only high gas prices. Due to extraordinary gas prices, it looks like we will be having the conversation quite soon. As the oil lobby is marginalized in this debate, perhaps we can discuss ideas which will actually reduce the amount of oil we consume. Moving freight from the road to the rail road might be a great start. It is a win win. We win the battle against congestion. We have fewer catastrophic accidents between trucks and cars. We reduce our carbon footprint. But, most of all, we use less gas and diesel. Using less oil reduces demand and lowers the price. If we mix in a few other ideas like the T. Boone Pickens Plan, sustainable biofuels and electric vehicles, we could finally stop empowering the petro-dictators who seem so bent on seeing America fail.

*This is based on the conservative estimate of 680 gallons per year.  Trucks will use much more.