When Trucks Stop Running, So Does Civilization. Energy and the Future of Transportation.

when_trucks_stop_running_book_coverWhen Trucks Stop Running, So Does Civilization. Energy and the Future of Transportation.

January 16, 2016   by Alice Friedemann    www.energyskeptic.com

Also see: When Trucks Stop Running: Table of Contents, Preface, References

Virtually everything in our homes, everything in our stores, got there on a truck. Prior to that, 90 percent of those items were transported on a ship and/or a train. If trucks, trains, and ships stopped running, our global economy and way of life would stop too.

The impact of peak oil on commercial transportation has been of great interest to me after a 22-year career at American President Lines, where I developed computer systems to keep cargo seamlessly moving around the globe and just-in-time between ships, rail, trucks, and customers.

So I was thrilled when Charles Hall invited me to write a book on energy and transportation for his Springer Energy series, a book that has just been published: When Trucks Stop Running: Energy and the Future of Transportation.

Ships, trucks, and trains are the backbone of civilization, hauling the goods that fulfill our every need and desire. Their powerful, highly-efficient diesel combustion engines are exquisitely fine-tuned to burn petroleum-based diesel fuel. These engines and the fuels that fire them have been among the most transformative yet disruptive technologies on the planet. This is a dependency we take for granted.

Since oil reserves are finite, one day supplies will be diminished to where the cost of moving freight and goods with our present oil-fueled fleet will not pencil out. We have an oil glut in 2016 and a corresponding lack of urgency. Yet, inevitably the day will come when oil supplies decline. What will we do? What are our options? That is the sobering reality my book explores.

Consider just how dependent we are on abundant and affordable oil, which fuels commercial transportation: Grocery stores, service stations, hospitals, pharmacies, restaurants, construction sites, manufacturers, and many other businesses receive several deliveries a day.  Since they keep very little inventory, most would run out of goods within a week.  When trucks stop, over 685,000 tons of garbage piles up every day in the U.S., sewage treatment ends as storage tanks fill up, and in two to four weeks water supplies would be imperiled as purification chemicals were no longer delivered. That is just the tip of the iceberg.

Although ships move roughly 90% of cargo and made globalization possible, it is hard to think of a single thing that isn’t transported on a truck at some point, if only for the last mile. Equally important are other kinds of “trucks” and equipment used in farming, logging, mining, construction, garbage, and countless human endeavors. Certainly it would be better to deliver goods by rail, which are four times more fuel efficient than trucks, or by ship, which can be up to 80 times more efficient than trucks. But there are only 95,000 route miles of railroad track, and 25,000 miles of inland and coastal waterways in the U.S. That’s compared to over 4 million miles of U.S. roads. Just why we are so reliant on trucks and under-utilize more efficient ships and trains is explored in my book.

Renewable electricity – solar and wind — is ramping up, but in our optimism over the renewable revolution, we collectively forget that our trucks, ships, and freight trains don’t run on electricity. Although I’d often thought about Robert Hirsch’s saying that peak oil was best framed as a liquid fuels transportation crisis, I had never fully researched the details of what this meant.  After all, vehicles potentially could run on coal-to-liquid fuel, natural gas, biofuels, hydrogen, or be electrified.

So for the past two years I’ve researched the evolution and future of commercial transportation, the technologies and energy resources available now or in the next decade that ships, locomotives, and trucks could run on. The ideal fuel would be a “drop-in” fuel so that we didn’t have to toss out over $1 trillion of vehicles and their engines and $4.6 trillion of transportation infrastructure that comprises 12% of all the wealth in the U.S.

Since fossil fuels are finite, ultimately we will have no choice but to run commercial transportation on renewable energy. The electric grid would have to play a role, so I look at what we would be involved to electrify trucks and locomotives via batteries or overhead wires. This seemingly inevitable future scenario requires understanding the challenges of getting to an electric grid that is 80 to 100% powered by renewables, utility-scale energy storage systems, and understanding how much energy storage is needed to cope with the intermittency and seasonality of wind and solar power.

The co-dependencies of electricity and computers make our transportation system even more fragile and vulnerable to failure. Electricity outages or software/equipment failures prevent ships, rail, and trucks from loading or unloading, since dozens of financial, tariff, manifest, bill of lading, and other documents are required to keep cargo moving.

What I have attempted to do in the book is to investigate every technical and energy option foreseeable for the movement of goods and services.   In the process, there is no avoiding an eyes-wide-open look at the challenges. These include renewable liquid fuels, climate change, the financial system, and corrosion.

Politics may be one of the most insurmountable challenges. To understand the evolution of U.S. energy policy and what, if any, plans are being made for the future of transportation, I read the transcripts of hundreds of congressional hearings in the U.S. House and Senate. If the global freight transportation system so central to our era of abundance has any hope of being sustained as oil declines, then political leadership, long term planning, and massive funding are essential. Some may liken this challenge to a technical “moon shot.” Right now, mobilizing for this change looks more like a long shot.

“When Trucks Stop Running: Energy and the Future of Transportation” is available in print and eBook at Springer, Amazon, and Barnes & Noble.



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When Trucks Stop Running: Table of Contents, Preface, References

Alice Friedemann.  2016. When Trucks Stop Running: Energy and the Future of Civilization. Springer.

Available in print and eBook at Springer, Amazon, and Barnes & Noble.

Table of Contents

1 When Trucks Stop Running, America Stops

2 Shipping Makes the World Go Round

From Sail to Steamships
The Container Ship Revolution
Ninety Percent of Global Trade Is Carried by Ships and Barges

3 Why You Should Love Trains

Trains Consume Less Fuel Yet Carry More Goods Than Trucks
A Brief History of Railroads
So Why Not Build More Railroad Tracks to Conserve Oil?
Who’s Going to Pay for It?

4 Why You Should Love Trucks

5 The Oiliness of Everything: Invisible Oil and Energy Payback Time

How Energy is Used in the U.S. Economy
Energy Return on Investment or EROI
When You Do an EROI Analysis, Clearly a Low EROI Is a Problem

6 Peak Oil and Transportation

Risks and Risk Management
Peak Oil May Be Less Than 20 Years Away
Oil Field Decline Rates
Where Will Additional Oil Come From?
Other Threats to Oil Supplies for the Transportation System

7 Distributing Drop-in Fuels: The Fastest Road to Something Else

Next Stop: Service Stations
Cost to Create Drop-in Fuel
Railroads Can’t Afford to Replace Their Locomotives
Conclusion: Time Is Running Out

8 Post Fossil Fuels, If Biomass Is the “Answer to Everything,” Is There Enough?

9 Hydrogen, the Homeopathic Energy Crisis Remedy

10 Natural Gas—A Bridge Fuel to Where Exactly?

Economic Peak Natural Gas and Tight Oil?
Import Liquid Natural Gas?
Or Export LNG? America’s Newfound Energy Independence
Is There Enough Natural Gas for Transportation?

11 Liquefied Coal: There Goes the Neighborhood, the Water, and the Air

The Future of CTL: How Much Diesel Could Be Made from Coal?
World and U.S. Peak Coal May Have Happened, or Will Soon

12 Who Killed the All-Electric Car?

So Why Isn’t There a Better Battery?

All-Electric Autos

13 Can Freight Trains Be Electrified?

D’oh! Why Electrify? Diesel-Electric Locomotives Already Are
Electric and More Efficient Than All-Electric Locomotives!
Electrify with Batteries? Been There, Done That. It Didn’t Work Out
Other Issues with Electrification
Europe’s Freight Trains Are Inferior. Why Copy Them?
Electrify Just the Busiest Corridors

14 All-Electric Trucks Using Batteries or Overhead Wires

Battery-Electric (BEV) Trucks
WAAAAY Too Expensive
Additional Costs
Trucks Running on Overhead Wires (Catenary)

15 Overview of the Electric Grid: Herding Lightning

16 The Electric Grid Trembles When Wind and Solar Join the High Wire Act   

Where Will Tomorrow’s Power Come from?
There Is No Free Lunch
The Electric Grid Trembles When Wind & Solar Join the High Wire Act
A National “Super-Grid”?
Wind and Solar Don’t Replace Conventional Power, They just Add to the Blaze
How Much Intermittent Wind and Solar Penetration can the Grid Handle?

17 The Electric Blues: Energy Storage for Calm and Cloudy Days

More Wind Power and the Short-Term Storage to Make that Happen
Longer Term Storage
Storage Goal: One Day of U.S. Electricity Power Generation
Pumped Hydro Storage (PHS)
Compressed Air Energy Storage (CAES)
Concentrated Solar Power (CSP) with Thermal Energy
Storage (TES)
Electrochemical Batteries
Battery Energy Storage at Grid Scale Is Limited by Materials

18 Other Truck Stoppers: Mother Nature  

Crumbling Concrete
Rust and Corrosion
Climate Change
The Water-Energy-Transportation Nexus
Nuclear Power Plants

19 U.S. Energy Policy: Oil Wars and Drill-Baby-Drill to Keep Autos Running?

Cars and Light Trucks Are a Huge Part of the Problem, Using 63 Percent of Transportation Oil
Energy Policy: Cars
Wars Keep the Oil Flowing

20 Where Are We Headed?

Hubbert’s Curve is More Like a Cliff
Setting National Priorities for How Petroleum Is Used
Food Distribution: Putting Food on the Table
Isaac Asimov and Admiral Hyman Rickover on Energy Descent
Isaac Asimov, “the Future of Humanity,” 1974
Admiral Hyman Rickover, “Energy Resources and Our Future,” 1957
More Research on How to Get the Most Bang for the Energy Buck
Shouting into the Wind

Preface: Running on Empty

Even as a child, I was interested in oil. When I was 10 years old, Dad drove us into the hot oven of Death Valley in a dark blue car with black seats and no air-conditioning. We were being cooked alive. The gas gauge crept toward empty for what seemed like hours. I thought, for sure, we were going to run out of gas. Cockroaches may be able to survive this heat, but I am not a bug! I will never forget finally pulling into the gas station, the drinking fountain getting ever closer until, at last, I felt the delicious chill of water in my throat. Dad gassed up the car, and all was well with the world.

A decade later, it looked like civilization itself was running on empty as the energy crisis of 1973 took over our lives. I was in college, and joined an alternate technology group. We watched engineers build electric cars, windmills, and convert a car to run on methanol. I got to help build a solar collector by drinking beer and painting the cans black. Saving the planet was not only going to be fun, it was going to be a party!

It wasn’t long before non-OPEC oil was found and the Mideast turned their oil tap back on, and I stopped worrying about energy. Renewable power was on the way and the “evil” oil companies wouldn’t be able to stop it. My grandfather, Professor Francis J. Pettijohn, was a seminal figure in sedimentary geology. Sedimentary basins—that is where you find oil! Grandfather would try to educate me about the energy density of oil and the high hurdles blocking the path of alternate energy, but it wasn’t until I read his memoir that my world view of running the planet on beer-can solar power changed. That’s when I discovered that Grandpa had been a friend and mentor of M. King Hubbert, who predicted world peak oil production around the year 2000.

Yikes! It was 2000. Had oil peaked yet? An Internet search led to a Pandora’s box of Jay Hanson’s die-off website, Yahoo group energy resources, and years later attending Association for the Study of Peak Oil conferences. I was a science writer and shifted my focus from natural history to energy-related topics, and have since then read hundreds of books and thousands of articles on energy from within the U.C. Berkeley library system.

Earlier in my life, to pay the mortgage I designed and architected software systems, which I learned how to do at Electronic Data Systems after rigorous training in analysis and assembler programming working on the Medicare system, followed by a stint at Bank of America in the check processing division, and finally 22 years at American President Lines (APL). As a systems engineer, you need to have both a “big picture” and detailed understanding of the business framework before designing a new system. Inevitably, everything is connected.

APL was a global shipping line that also routed cargo on trucks and trains as well as helped customers with logistics, especially just-in-time freight and the fastest, most reliable delivery times possible within a continuous intermodal flow of containers across ships, trains, and trucks. APL was a leader in transportation and had the most extensive container ship system in the U.S. by the late 1960s, and partnered with rail to start the StackTrain service, containers stacked double high on railcars, tremendously increasing the efficiency of trains and reducing fuel consumption.

All of the APL computer systems needed to be up 24 × 7, everywhere, or ships, trucks, and trains would stop as Bills of Lading, manifests, and dozens of other legal documents could not be produced. Around the clock, everything from military supplies for the 1991 Gulf War to running shoes was kept on the move with as little waiting time as possible between modes of transportation.

When a new project came along, I needed to understand how long it would take and how many staff were needed to make sure an “improvement” didn’t cost more than the money saved. This is very much like the “energy returned on invested analysis” performed to make sure more fossil energy isn’t invested than returned on a given technology or project.

In business, this kind of analysis is essential to prevent bankruptcy. Yet when scientists find oil, coal, and natural gas production likely to peak within decades, rather than centuries, or that ethanol, solar photovoltaic, tar sands, oil shale, and other alternative energy resources have a low or even negative energy return on the energy invested, they are ignored and called pessimists, no matter how solid their findings. For every one of their peer-reviewed papers, there are thousands of positive press releases with breakthroughs that never pan out, and economists promising perpetual growth and energy independence. Optimism is more important than facts. And, it’s essential for attracting investors.

Civilization as we know it depends on our global transportation system of ships, trains, and trucks, all of which are fueled by oil. Since oil reserves are finite, one day supplies will be diminished to where the cost of moving freight and goods with our present oil-fueled fleet will not pencil out. We have an oil glut in 2015 and a corresponding lack of urgency. Yet, inevitably the day will come when oil supplies decline. What will we do? What are our options? That is the sobering reality this book will explore.

Using my transportation knowledge and the analytical skills I learned during my 27-year career as a systems engineer, my science background (B.S. in Biology with a Chemistry and Physics minor from the University of Illinois), and what I have learned over what is now 15 years of energy research, I will look at the vulnerabilities of our current commercial transportation sector.

Everything in our homes, everything in our stores, got there on a truck at some point. Before that, many of those goods also were transported by ship and/or train.

Come the day that oil is no longer abundant and affordable, will the millions of trucks that make our way of life possible be able to keep on running? I’ll look at the energy scenarios that could disrupt trucking, followed by overviews of the roles and respective energy efficiency of ships, railroads, and trucks—the three modes of heavy-duty transportation essential to keeping industrial civilization running. After that there are three chapters on oil: how invisible yet necessary it is, peak oil risks, and the distribution of liquid fuels. Then the viability of alternative fuels that are already commercially developed to replace oil is considered: biofuels, hydrogen, natural gas, and liquefied coal. Another way transportation might continue without a diesel fuel substitute is electrification with batteries or overhead wires, the subject of the next chapters. If electricity is to be used to power transportation, then it is important to understand the issues that need to be solved as we migrate towards a 100 % renewable electric grid as fossil fuels decline. Finally I look at other issues that will affect transportation such as climate change, at U.S. government energy policy since the first energy crisis in 1973, and then conclude with how I see the road ahead.

This book is very United States-centric, because the U.S. uses the most oil of any nation, is the most dependent on oil for transportation, and will be the most affected by oil decline. America is also the military superpower that keeps oil flowing from the Middle East (or at least thinks it does), where two-thirds of the remaining oil lies, to Europe and Asia. Finally, the U.S. is where I live.

We live in the Oil Age, and as oil declines, our lives will change. Eyes wide open, this book explores the way forward.

The book would need to be many hundreds of pages to cover commercial and noncommercial energy technology as much as I’d like, but more information can be found here on my website, www.energyskeptic.com.

References in the Book

Below are the references cited in the book in alphabetical order, but I did far more research than this, and the book could have easily had a reference section much longer than the book itself.

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Additional material read but not cited in the book:










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Electromagnetic Pulse (EMP) articles

Bob Adelmann. May 6, 2015. EMP Threats Force NORAD Back Into Cheyenne Mountain. The New American.

NORAD (North American Aerospace Defense Command) is moving back into its previous Cheyenne Mountain underground bunker in Colorado Springs because it is EMP-hardened, and due to threats from enemies who now possess the capabilities to launch an EMP nuclear weapon from the south where NORAD is blind.

North Korea now has operational the KN-08, a nuclear-weapon-armed missile, that can be launched undetected and set off a nuclear explosion sufficient to shut down the entire North American electric grid.

NORAD is prepared to defend the country from attacks from North Korea and Iran (even if negotiations are successful), provided that those attacks come over the North Pole. But all eyes are facing north, with none facing south.

Peter Vincent Pry, executive director of the EMP Task Force, has written frequently in attempts to warn citizens of the danger. Back in August he and James Woolsey, former CIA director said in a Wall Street Journal that North Korea and Iran will soon match Russia and China in their ability to launch an EMP attack with 1) simple ballistic missiles such as Scuds launched from a freighter near our shores, 2) space-launched vehicles able to loft low-earth-orbit satellites, or 3) simple low-yield nuclear weapons that can generate gamma rays and fireballs.

Pry said it wouldn’t take much to melt the grid with an EMP strike, most likely from the detonation of a nuclear weapon in space, which would destroy unprotected military and civilian electronics worldwide, blacking out the electric grid and other critical infrastructure for months or years. Iran should be regarded as already having nuclear missiles capable of making an EMP attack against the U.S. Iran and North Korea have successfully orbited satellites on south-polar trajectories that appear to practice evading U.S. missile defenses, and at optimum altitudes to make a surprise EMP attack.

Such costs were spelled out in a dystopian novel that made it onto the New York Times best-sellers list back in 2011: One Second After, by William R. Forstchen. It’s the story of how one man struggles to deal with a world that no longer works, first evidenced when cars passing by on the highway come to an immediate and permanent halt thanks to internal computers that no longer work. In the afterword, Forstchen quotes a letter from Captain Bill Sanders of the U.S. Navy, who notes that One Second After is not so much a novel as it is a warning: “An Electronic Pulse (EPM) explosion over the continental United States would have devastating consequences for our country….A well-designed nuclear weapon detonated at a high altitude over Kansas could have damaging effects over virtually all of the continental United States. Our technologically oriented society and its heavy dependence on advanced electronics systems could be brought to its knees with cascading failures of our critical infrastructure. Our vulnerability increases daily as our use and dependence on electronics continues to accelerate.”

Joan Trossman. 21 Nov 2012. Fire in the Sky. Scientists warn of a solar flare large enough to paralyze our electrified world. Pasadena Weekly.

If you have never heard of an electromagnetic pulse, or EMP, then you have not spent any time worrying about an EMP causing the end of civilization as we know it. But scientists and some policymakers worry about such a thing happening, and for very good reason.

If an EMP were to occur over the United States, caused either by a particularly violent solar storm or by a small nuclear device detonated many miles above the ground, chances are high that the country’s entire electrical grid would fail, as a massive surge of electricity would fry the huge transformers that keep the grid humming. Satellites we rely on for navigation and communication would be damaged beyond repair, and society would crumble into a dysfunctional scramble for survival. The very necessities of life, such as clean water, food, medications, transportation, even government, would all either disappear or be in very short supply.

Given the fact that extreme solar events happen once or twice a decade, “It is just a question of not if, but when the Earth happens to be in the path of these kinds of [solar] storms,” according to Dan Baker, director of Laboratory for Atmospheric and Space Physics (LASP) at the University of Colorado.

Solar flares are not unusual.  On March 13, 1989, one blew out power in Quebec, leaving 6 million people in the dark. In 1921, a solar storm hit, but didn’t cause much damage. Today, such an occurrence would have darkened half of North America.

Last summer, Baker said there was a very close call. “Just on July 22, there was a very ugly, mean-looking active region on the sun that had moved across the face of the sun. A satellite was watching it. A huge flare, and then a CME, came at the spacecraft and it was moving at the highest recorded speed that has been seen in the modern Space Age. It reached the satellite in 17 hours. That’s an hour faster than the Carrington Event, and it led to extremely intense magnetic fields in the interplanetary medium. For all intents and purposes, that was a Carrington Event that just missed us. We dodged the proverbial bullet there. Now we know there have been others like this.

Can it happen again? “Some people say that the Carrington Event is a moldy old event and these things happen only once in 1,000 years,” Baker said. “I think recent work has suggested quite the contrary. The probability of any of these occurring during one 11-year cycle of solar storms is like 10 percent, a pretty significant probability. It’s not a rare thing.

Ultimately, whether triggered by a rogue nation’s high-altitude detonation of a small nuclear weapon or set off by a rare but possible extremely strong solar flare, the result will be the same if we continue to do nothing.

Congressional committees have acknowledged the danger since 2001. There have been studies ordered, hearings held, admissions of lack of knowledge and lists of problems. Still, it remains in the talking stages and no action has been taken to lessen the danger. The Department of Homeland Security admitted as recently as this past September that it has no estimate of the costs associated with an EMP. But experts, including Baker, have placed the cost at $1 trillion to $2 trillion. Estimates of the cost of meaningful preparation are $150 million to $200 million.

On Sept. 12, the House Committee on Homeland Security, Subcommittee on Cyber security, Infrastructure Protection, and Security Technologies held a hearing on the electromagnetic pulse threat. Rep. Dan Lungren of California chaired the hearing.

Lundgren, a former California Attorney General, said in his opening statement that an EMP from either a geomagnetic storm or an attack would wipe out the entire country’s electrical grid. Referring to a 2010 computer simulation conducted at Oak Ridge National Laboratory, Lundgren said the power system collapse could take four to 10 years from which to fully recover.

“In 2004 and 2008, the EMP Commission testified before the Armed Services Committee that the US society and economy are so critically dependent upon the availability of electricity that a significant collapse of our grid…could result in catastrophic civilian casualties,” Franks said. “This conclusion is echoed by separate reports recently compiled by the DOD (Department of Defense), DHS (Department of Homeland Security), DOE (Department of Energy), NAS (National Academy of Sciences), along with various other agencies and independent researchers.

On Oct. 18, federal regulators took the first step toward mitigating the effects of an EMP. The Federal Energy Regulatory Commission (FERC) said present standards have “a reliability gap” and “do not adequately address vulnerabilities” from a destructive solar storm. FERC called for the agency that oversees the national grid to draft rules requiring power companies to assess their weaknesses and upgrade their grids to withstand the electrical onslaught.

Most power companies in the country are privately owned. As such, those companies have categorized the danger of an EMP as highly unlikely and have refused to officially assess their own vulnerabilities. In Baker’s opinion, that’s a big mistake.

“What would a Carrington Event look like in modern times? We need to be constantly vigilant, we need to keep our eye on our beautiful but dangerous partner here, the sun,” Baker said. “Knowing what’s coming at us is going to be very advantageous.”


Nov 22, 2012.  Preventing Armageddon Would Cost Only $100 Million … But Congress Is Too Thick to Approve the Fix. WashingtonsBlog

Government Spends Tens of Trillions On Unnecessary, Harmful Projects … But Won’t Spend $100 Million to Prevent the Greatest Threat.


Newt Gingrich.  12 July 2012.  Newt Gingrich: Preparing for the next outage. Washington Post.

Gingrich is a former speaker of the House and a Republican candidate for president.

Without power, the comforts of home become worthless. You sit in the sweltering heat, realizing you are living in a box that, without electricity, is a trap. You pray for the “juice” to return before your groceries go bad. You either make do in the heat or find refuge with friends who have electricity.  I write this now because of my concern for national security and our power grid, which are susceptible to doomsday-level damage if hit by an electromagnetic pulse (EMP) strike or a major solar storm.

It is almost unthinkable, yet possible, that an enemy could detonate a nuclear weapon over the atmosphere over the continental United States, triggering an electromagnetic pulse. This would short-circuit our power grid, taking power off­line for months, perhaps even years.

A similar crisis could be sparked by a solar storm like the Carrington Event of 1859, a type of geomagnetic disturbance that occurs about every 75 years. Statistically, we are long overdue for such a storm. There have been some recent examples of the potential impact, such as the millions in Quebec who lost power for several hours in 1989 as a result of a space storm.

Our nation’s communications infrastructure, modes of transportation and many fundamentals of survival all rely on a power grid that is vulnerable. The current system lacks safety features needed to prevent damage to critical electrical infrastructure.

In 2009, my friend — and sometimes co-author — William R. Forstchen published a truly frightening book, “One Second After.” The story is fiction but based on hard facts. It is a cautionary tale about the threat of EMP strikes and major solar storms, known as coronal mass ejections.

Suppose that, rather than being a temporary disruption in our lives, the power outage lasted weeks or months, or even years. Consider what state all of us, from the richest to the poorest, would be in if we were still literally in the dark. Millions could be trapped in houses or apartments that were never designed for this climate without air conditioning. No cool air; months with no food shipments and every pharmacy shut down — no refills for life-sustaining medications.

In a crisis, many in the Washington area could not even flee because the impact of an EMP attack would disable most cars and public transportation. The water supply would go dry without electricity to pump water from rivers and wells. Imagine if you could find a bottle of potable water for, say, your children. How much would you pay? What would you pay with if every bank and ATM were shut down? Public safety? Forget it. No power means no police cars, no communications and no 911 emergency service. For criminals, it would be time to run rampant.


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U.S. House drilling on federal versus non-federal land

Serial No. 112-170. August 2, 2012. The American energy initiative part 27: A focus on growing differences for energy development on federal versus non-federal lands. House of Representatives. 171 pages.

[ Who invites these “experts”?  Will Sullivan provide deniability to congressional members when the shale gas bubble pops?  I can imagine the evening news when congressmen say in shocked tones that we had no idea there wasn’t a century of oil and gas… This is yet another drill baby drill congressional session, I’ve posted it because I want to keep track of who says we’re energy independent since that’s affecting U.S. national security and energy policy.  Alice Friedemann www.energyskeptic.com]

Dan Sullivan, Commissioner Department of Natural Resources State of Alaska: Today, our nation has by some estimates a 100-year supply of gas and the federal government is now focused on the extent to which to allow gas exports. Oil production, at 6 million barrels a day, is back to levels not seen in almost 15 years, making the U.S. the world’s third-largest producer. And U.S. natural gas production is approaching record levels. These trends are likely to continue. PFC Energy predicts that by 2020, the U.S. will be the largest hydrocarbon producer in the world exceeding Saudi Arabia and Russia. This is a bold prediction, but federal agencies back that up, estimating that the United States has more than a trillion barrels of technically recoverable oil and more than 1,000 trillion cubic feet of natural gas, including both conventional and unconventional resources.

BOBBY L. RUSH, ILLINOIS. while Democrats under President Obama’s leadership have put forth a truly all-of-the-above energy agenda, it appears that my Republican colleagues are once again taking their cue from one of their most influential leaders, Sarah Palin, and reviving their simplistic ‘‘drill, baby, drill’’ energy agenda. Merely a few hours ago, after holding a partisan vote to do away with new projects under the DOE’s loan guarantee program in the full committee yesterday, which would have invested Federal dollars into different types of renewable and clean energy projects to compete with the Republican Party favorite fossil fuel industry, the majority is here today holding a hearing on drilling on Federal versus private lands.

Never mind the fact that the Energy Information Administration has confirmed that domestic oil production in the U.S. has increased every year since 2008, that we are importing less oil than any time in the past 13 years, and that American demand is actually lower now than it was a year ago. And, Mr. Chairman, it appears that my Republican colleagues will continue to ignore the fact that the U.S. has set more than 40,000 hot temperature records this year alone, and that the last 12 months have been the hottest ever recorded in our Nation’s history. Today, fully two-thirds of the country is experiencing drought, and 30 percent of the Nation’s corn crop is in poor or very poor condition, while at the same time, water levels in four of the five Great Lakes have actually plummeted down to unprecedented levels due to high evaporation rates and insufficient rainfall.

Just yesterday the Agriculture Department designated more than half of all U.S. counties as disaster areas in 2012. The main reason? Drought. And the Agriculture Secretary Vilsack signed a disaster designation for 218 counties in 12 States just yesterday morning, bringing the national percentages to 50.3 percent.

I remind you that today, more than 113 million Americans are living under extreme heat advisories, and yet, despite repeated requests from myself and Ranking Member Waxman to hold hearings on the science behind all of the extreme weather events associated with climate change that the Nation has been experiencing, we have yet to examine this vitally important issue just one time, just once this year, one time before this subcommittee. Even former climate change skeptics such as Richard Muller, who penned in a July 28 New York Times editorial entitled ‘‘The Conversion of a Climate Change Skeptic,’’ even Mr. Muller has now come out on the record and joined the overwhelming consensus of scientists and researchers who have stated that global warming is indeed occurring, and that human causes are indeed behind it. Yet as America burns, this committee fiddles. Even as Congress prepares to vote on a bill, drought relief bill for farmers this morning, farmers who are suffering from record drought in the Midwest and beyond, even when you and I and the other members of this subcommittee, we will be casting votes sometime this morning, this very subcommittee refuses to hold one hearing, just one hearing on the causes behind these droughts, or what can be done for our Nation, for this Federal Government, for this Congress to lessen the impact of the heat on the American people. I support a recent CRS study finds that 96% of the increase in domestic oil supply since 2007 has come from non-Federal lands.

HENRY A. WAXMAN. CALIFORNIA. Today the subcommittee holds a hearing to compare oil and gas production on Federal lands to production on private lands. We will hear once again, as we just heard, that the Obama administration is hostile to oil and gas production, and we will hear once again that oil and gas production should be pursued at the expense of renewable energy and other goals. Well, that is the rhetoric. Now here are the facts. Domestic oil and gas production has increased each year of the Obama administration, and it is the highest it has ever been in 8 years. America’s dependence on foreign oil has gone down every single year for the last 3 years, and oil production from Federal lands is higher today than it was under the last 3 years of the Bush administration.

It is true that oil production on private lands has increased more than it has on Federal lands.

Some Republicans have used this as evidence that the President must be disfavoring the oil industry, but the fact is that most of the increase in domestic oil production has occurred from developing shale formations. These formations happen to be on private lands. The Federal Government manages only a small portion of these areas. For instance, the Bakken shale has made North Dakota one of the country’s top States in oil production, but Federal lands make up a small percentage of it. Even offshore oil production remains strong. In spite of one of the world’s worst environmental disasters, oil production from the Outer Continental Shelf in 2011 was equal to or higher than any of the last 3 years of the Bush administration. The Obama administration has taken many steps to facilitate oil and gas production. The Bureau of Land Management has reformed its leasing process with a tracking system for applications that shortens wait times.

But we shouldn’t lose sight of the fact that public lands are not solely for oil and gas production. Our public lands are held in trust for the American people, not the oil companies. Public lands are used for conservation, outdoor recreation, watershed protection, timber, and grazing. They can also be used for renewable forms of energy. In fact, the Obama administration recently completed an assessment that will expedite permitting for solar installations on public lands in the Southwest. This has the potential to produce enough electricity to power 7 million homes. The administration’s job is to balance these competing demands.

When you are looking at, say, a resource boom—which is what North Dakota is all about—you have to ask whether a comparable resource boom is possible in a much more populous state, or the United States as a whole. One commentator declared that there is as much oil under California as there is under North Dakota; quite possibly. The question is, how big a deal would extracting that oil be in a state with 50 times North Dakota’s population; how much difference would it make to, say, the state unemployment rate? And the answer, of course, is virtually none. To have a North Dakota-type boom in California, you would have to find 50 times as much oil; to have it nationally, you’d have to find 500 times as much. Not likely.

ED WHITFIELD, KENTUCKY. North Dakota has an unemployment rate today of around 3 percent, and so it raises the question on the energy policy and economic policy, what is North Dakota doing that is different than other States?

Alaska, where output has been declining over the same span that North Dakota’s output has been increasing. Now, the main difference between Alaska and North Dakota is that Alaska has far more areas of federally owned and controlled lands, and this administration has substantially cut back on new energy leasing in these Federal lands and offshore areas, and while that may not be the only factor that has led to this difference of unemployment and economic growth, we hope this morning to find out how substantial a factor is it.

And it isn’t just Alaska. For example, this administration has cut back on new leasing in the federally controlled Gulf of Mexico and has also been slow to issue the necessary permits for previously leased areas, and the red tape facing energy companies operating on Federal lands throughout the intermountain west has kept the region below its potential for energy production and jobs.

In contrast, relatively little land in the energy-rich Bakken formation in North Dakota is federally owned. There the oil industry has been allowed to partner with private landowners to expand production. In the last decade alone, North Dakota has risen from the eighth largest producing State to the second largest. An estimated 35,000 new direct jobs and many more indirect ones are a big part of the reason why the State’s unemployment rate is around 3 percent. In effect, North Dakota gives us a glimpse of what would be possible in many other parts of the country if only we could change some policy in Washington, DC. And I might add that gasoline prices unfortunately seem to be creeping

Mr. Michael Nedd, Assistant Director of Minerals and Realty Management at the Bureau of Land Management. Thank you for the opportunity to discuss the role of the Bureau of Land Management in facilitating responsible development of oil and gas resources from our Nation’s public land. The BLM is responsible for protecting the resources and managing the use of our Nation’s public land on over 245 million surface acres, approximately 700 million acres of onshore subsurface mineral estate, and 56 million acres of Indian trust land. We work closely with State governments and other Federal agencies in the management of this subsurface mineral estate. The BLM manages public lands on very complex, multiple use mandate from Congress, and consider a wide variety of factors in land management decisions, including industry interests, conservation value, as well as other potential use of the public lands.

In addition to oil and gas production, the BLM’s unique multiple use management of public lands also includes activities such as livestock grazing, outdoor recreation, solid minerals development, and the conservation of natural, historical, cultural, and other important resources. Secretary Salazar has emphasized that the development and production of conventional energy resources from BLM-managed public and Indian lands, are an important component of the new energy frontier and play a critical role in meeting the Nation’s energy needs. In 2011, conventional energy development from public and Indian trust land produced 14% of the Nation’s natural gas, 6% of its domestically-produced oil. In fiscal year 2011, onshore Federal oil and gas production resulted in nearly $2.9 billion in royalties, approximately half of which was paid directly to the States in which the development occurred.

The geography of resource occurrence and the relative economic attractiveness of development are key factors impacting discoveries and production level on both Federal and non-Federal lands. Currently, there are more than 37 million acres of public lands that are leased for oil and gas development. Only about 12 million acres are under production. There are huge potential oil and natural gas plays in the Marcellus, Fayetteville, Barnett, Niobrara, and Bakken shale formation where there is an abundance of oil and gas. These geological formations exist largely on State and private minerals estate. The fact that only one-third of Federal leases are in production may be partly attributable to the abundance of oil and gas in these shale formations on the State and private land and to low natural gas prices relative to the price of oil.

The BLM currently manages nearly 37 million acres of onshore oil and gas leases. In FY 2011, over 117 million barrels of oil were produced from public and Indian lands. In addition, the nearly 3 trillion cubic feet of natural gas produced from public lands made 2011 the second-most productive year for natural gas production on record. Natural gas production on BLM lands increased by 6 percent during 2009-2011, compared with 2006-2008. In 2011, conventional energy development from public and Indian lands produced 14 percent of the Nation’s natural gas, and 6 percent of its domestically produced oil. In Fiscal Year (FY) 2011, onshore Federal oil and gas production resulted in nearly $2.9 billion in royalties, approximately half of which was paid directly to the states in which the development occurred. In addition to the multiple uses of the public lands, the BLM complies with a variety of statutes that are not necessarily applicable to state or private lands, such as the National Environmental Policy Act (NEPA) and the National Historic Preservation Act.

Given the checkerboard ownership patterns of many public lands in the West, as well as the significant portfolio of split estate ownership, the BLM also must coordinate with other landowners and land managers. Of the 700 million acres of mineral estate managed by the BLM, 57 million acres are under surface acres that belong to private entities, and a significant number of acres are under surface managed by other Federal agencies. It is important that the BLM provide not only the public an opportunity to engage on these issues, but also neighboring landowners.

The National Petroleum Reserve in Alaska (NPR-A) is a vast area of nearly 23 million acres on the North Slope of Alaska that has Federal production potential. In 2010, the U.S. Geological Survey estimated that 896 million barrels of conventional, undiscovered technically-recoverable oil and 53 trillion cubic feet of conventional, undiscovered technically-recoverable gas were within NPR-A and adjacent state waters.

Mary Wagner Associate Chief, U.S. Forest Service U.S. Department of Agriculture. Thank you for the opportunity to appear before you today to provide the agency’s perspective regarding oil and gas development on the National Forests and Grasslands. We would like to describe the role of the Forest Service in oil and gas leasing and operations and provide an overall scope of the oil and gas program on the National Forest System (NFS) lands. The Forest Service is committed to doing its part to foster and encourage private enterprise in meeting the nation’s energy needs, while at the same time protecting the landscapes and watersheds for present and future generations. Oil and gas development is one of a variety of renewable and non-renewable energy development activities authorized on the National Forests and Grasslands. NFS lands provide 25% of the nation’s coal production and 16,000 megawatts of hydropower generation capacity, enough to power twelve to sixteen million homes. The Forest Service authorizes uranium mining, geothermal development, and biomass removal for power generation. The Forest Service also authorizes a number of active mines which produce minerals needed for energy development and transmission (such as copper). The agency also authorizes thousands of miles of electric transmission and pipelines that distribute energy to market. Specific to oil and gas, we have authorized almost 20,000 active wells on NFS lands in 19 states. While all of these wells are located on surface managed by the Forest Service, their production may be from either federally-owned or privately-owned, sub-surface minerals. In 2009 and 2010, oil and gas production from federally-owned minerals on NFS lands generated an estimated $136 million and $186 million respectively in bonus and royalty payments to the U.S. Treasury. In 2010, this production had a market value of $1.2 billion,

A large portion of the royalty revenue is collected for and delivered to states and counties. Specifically 25 percent of the revenue from Acquired Lands, which includes the National Grasslands, as well as 50 percent of the revenue from Public Domain lands, is delivered to the states and counties. Almost three-fourths of the approximately 20,000 wells on NFS lands overlie subsurface mineral estate that is privately held. This “split estate” development predominately occurs on NFS land in the east. The majority of these wells are low volume producers with typical depths between 2,000 and 3,000 feet which require small areas of surface occupancy (pads) of an acre or less. National Forests in the east also have significant development potential for shale gas. We

Although most of the oil and gas wells on NFS lands are in the east, most of the oil and gas production is in the west; most notably in the Williston Basin with its Bakken Formation in North Dakota on the Dakota Prairie National Grassland, and the San Juan basin in northwestern New Mexico on the Carson National Forest. It is common practice in these areas to utilize larger pads (typically 3-5 acres) to drill multiple wells to minimize the surface “footprint” of development. On the Dakota Prairie National Grasslands, we approved 14 surface use plans of operation in 2008, 13 plans in 2009, 29 plans in 2010, and 36 plans in 20) I. One of the challenges in being responsive on the Dakota Prairie National Grasslands has been our ability to hire, provide housing and retain employees to work in the same geographic area which is experiencing the oil and gas boom. We are working diligently to address this challenge. There are a number of factors which influence where, when, and how oil and gas is developed on NFS lands. The level of interest from industry is largely a function of available supply as well as the economics of development, from prices to the cost of extraction. This cost is highly variable and depends upon the deposit, drilling technique to access the deposit, and transportation costs among many other factors.

ADAM SIEMINSKI, EIA. Federal offshore natural gas production has been on a downward trend for the last 9 years, falling by more than 50%, as commercial development moved from the gas-prone shallow shelf areas in the Gulf of Mexico to the richer oil-prone deep waters further out in the Gulf. Production from onshore Federal lands was generally growing over this period and actually exceeded the offshore production by 2008.

EIA estimates for the non-Federal oil production are based on monthly data from State agencies and purchased third-party data. The lag from when the data are first reported to the time that they stop changing significantly varies from State to State. A few States, like North Dakota and Alaska, report relatively complete data within 2 months of the close of the production month. Other States with large numbers of producers, like Texas and Oklahoma, can take a year or two to report complete data. For the Federal offshore area, EIA relies on the metered data from the Department of the Interior.

Unlike oil production, EIA collects data on natural gas production from about 240 operators each month. This EIA survey primarily covers five States and the Federal offshore Gulf of Mexico. Though more accurate than the oil production estimates, the current natural gas monthly production survey does not collect data on Federal lands or from some of the emerging shale States like Arkansas and Pennsylvania. In its Federal year, fiscal year 2013 budget, EIA has proposed a small increase in funding to improve the timeliness and accuracy of all of the oil and natural gas production data. This proposal would increase data quality as well as enable EIA to identify and report these trends affecting the Nation much sooner.

Dan Sullivan, Commissioner Department of Natural Resources State of Alaska. A few years ago, many believed our nation was running out of the natural resources needed to power our economy. Indeed, since the oil shocks of the 1970s, a sense of chronic energy scarcity and vulnerability has dominated American thinking. But recent innovations in unconventional oil and gas extraction have upended the conventional wisdom. Hardly a day goes by without fresh evidence of the United States regaining its status as a hydrocarbon superpower. A few years ago, we were preparing for large-scale natural gas imports due to diminishing supplies. Today, our nation has by some estimates a 100-year supply of gas and the federal government is now focused on the extent to which to allow gas exports. Oil production, at 6 million barrels a day, is back to levels not seen in almost 15 years, making the U.S. the world’s third-largest producer. And U.S. natural gas production is approaching record levels. These trends are likely to continue. PFC Energy predicts that by 2020, the U.S. will be the largest hydrocarbon producer in the world exceeding Saudi Arabia and Russia. This is a bold prediction, but federal agencies back that up, estimating that the United States has more than a trillion barrels of technically recoverable oil and more than 1,000 trillion cubic feet of natural gas, including both conventional and unconventional resources.

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Former President George W. Bush energy policy

[ Below are excerpts of various news stories where President Bush discussed energy that I ran across over the years.  Perhaps not the best ones, but I’m researching U.S. energy policy now and may add more articles in the future.  Alice Friedemann  www.energyskeptic.com ]

Alex Keto. 2005. WHITE HOUSE WATCH: Ending The Hydrocarbon Society. A Dow Jones Newswires Analysis.

Amid high prices and surging demand for crude oil and gasoline, President George W. Bush said the era of the “hydrocarbon society” is coming to an end, and the U.S. will have no choice but to diversify its sources of energy.

“The hydrocarbon society will still be with us, but it can’t be with us to the extent it is today,” Bush said in an interview with CNBC’s Ron Insana that was taped Monday and broadcast on Tuesday.

“Listen, we’re all going to have to diversify away from hydrocarbons over time,” he said.

As an example of this, Bush cited his own efforts to fund research into hydrogen powered cars and said the U.S. needs to build new nuclear power plants.

For those looking for a quick fix to the problem of high energy prices, the president had bad news, saying that even if Congress passes his package of energy bills, it won’t bring immediate relief.

“Even signing an energy bill, you don’t have an instant fix,” Bush said. “It took us awhile to get to where we are today and it’s going to take us awhile to become less dependent on foreign sources of energy.”

The one thing that is clear is that Saudi Arabia is not in the same position it was a few years ago when it had “millions of barrels” of excess capacity sitting idle, Bush said.

As he has in the recent weeks, Bush cited rapidly increasing demand for crude oil from China and India, but said he saw no evidence China, for instance, is trying to push the U.S. out of any energy markets.

“I don’t think there’s an…economic war plan that would crowd the U.S. out of the energy market. I do think they’re (China) trying to, you know, satisfy a huge appetite for a massive economy growth, a fast-growing economy,” Bush said.

“I was pleased to see that, that (the Chinese are willing to build nuclear power plants. And I would hope India would do the same thing,” Bush said. “Because as they demand energy, it would be very helpful that a part of that demand is not in the hydrocarbon sector.”

Another area the president wants to take a close look at is the regulations surrounding the construction of refineries. It has been literally decades since a new refinery was built in the U.S.

Bush said one way to push gasoline prices lower is to make sure there is a greater supply of the commodity.

Another factor in the energy equation is the falling dollar. Given that crude is priced in dollars, a weaker dollar tends to force producers to push the price of oil higher in order to recoup costs incurred in other currencies.

Bush scoffed at the notion that he has no objection to high energy prices because of his own background in the oil sector and because it helps boost the bottom line of oil companies. Instead, he said it was clear gasoline prices were hurting some Americans and it was weighing on the stock market.

“People are constantly adjusting, and I suspect some (of the decline in) the stock market has to do with the price of gasoline. You know, when the price of crude oil tends to go up and the stock market tends to go down,” Bush said.

He also said the government and the federal reserve are watching for signs of inflation stemming from higher oil prices but the best solution to any inflationary pressures are tax cuts. This puts more disposable income in the pockets of Americans, Bush said.

Mar 9, 2005 Remarks by the President on Energy Policy


Contact: White House Press Office, 202-456-2580

WASHINGTON, /U.S. Newswire/ Franklin County Veterans Memorial Columbus, Ohio

THE PRESIDENT:  I’m here to talk about: the importance of a sound national energy policy.

Everybody who drives a car or runs a farm understands the importance of energy. Every small business, which dreams about expanding his or her job base, worries about energy. Families worry about energy. And higher prices at the gas pump and rising home heating bills and the possibility of blackout are legitimate concerns for all Americans. And all these uncertainties about energy supply are a drag on our economy. It is difficult for entrepreneurs to risk capital when they cannot predict the size of next month’s energy bill. If small businesses have the choice between adding a new worker or keeping the machines running, they’re not going to do much hiring.

As you learned here in Ohio in the summer of 2003, it’s hard to plan with confidence if you’re not sure the lights are going to stay on. During my second week as President, as Sam pointed out, I put together a task force to address America’s energy challenges. Energy consumption was growing, costs were rising, we had an unreliable power grid, and we were dependent on foreign energy. This task force sent back a hundred recommendations to improve energy policy, and we put some of them into effect:

1) we streamlined the permit process to encourage exploration for oil and gas

2) we filled the Strategic Petroleum Reserve to improve our security during a time of war

3) we promoted new forms of energy conservation at government facilities

4) we increased weatherization assistance by nearly 50 percent to help more low-income families insulate their homes and save on their heating bills.

This country must do more, and it requires legislative approval by the United States Congress. To meet America’s energy needs in the 21st century, we need a comprehensive national energy policy. It’s time for Congress to act.

Ideas or examples [ I’ve extracted just a few of them below ]

  • I’ve proposed tax credits for drivers who choose fuel-efficient hybrid vehicles.
  • We’re helping to develop lighter automobile parts that will save weight without sacrificing safety.
  • We got flat panel computer screens that can operate around the clock and consume very little power.
  • There’s traffic signals that give off more light while taking in less electricity.
  • You can store your food in super-efficient refrigerators that use less energy than a 75-watt light bulb.
  • Devices called smart meters show how much energy you’re using and then calculate exactly what that energy is going to cost you.
  • Look for the Energy Star label

A sound energy bill must meet four objectives:

  1. It must promote conservation and efficiency
  2. Increase domestic production
  3. Diversify our energy supply
  4. Modernize our energy infrastructure

The first objective of a sound energy bill is to encourage the use of technology to improve energy conservation. We’re constantly searching for smarter ways to meet our energy needs. We’re constantly looking for new technologies to help Americans conserve. I mean, it makes sense, doesn’t it? If you want to become less dependent on foreign sources of energy, we’ve got to be better conservers of energy. The more we conserve, the less we use; and the less we use, the less dependent we are on foreign sources of energy.

Secondly, we need to encourage more energy production at home. If you want to become less dependent on foreign sources of energy, you need to find more energy here. The need is clear. Over the past three years, America’s energy consumption has increased by more than 3 percent, yet our domestic energy production has decreased by 2 percent. That means relying more on energy from foreign countries.

We now import more than half our oil from abroad. Think about that: more than half of the oil that we consume in order to maintain our lifestyles comes from overseas, or abroad. And our dependence is growing. We’re becoming more reliant upon natural gas, and a lot of it is coming from outside our borders. I believe that creates a national security issue and an economic security issue for the United States. And that’s why it’s important for us to utilize the resources we have here at home in environmentally friendly ways.

Increasing our energy security begins with a firm commitment to America’s most abundant energy sources — source, and that is coal.

Our nation is blessed with enough coal to last another 250 years. We’ve got a lot of it. In Ohio, when you use electricity there’s a 90% chance that that electricity is coming from coal. Coal is at the heart of Ohio’s energy strategy, and it should be at the heart of America’s energy strategy.

Coal presents an environmental challenge.   Most of Ohio’s coal is high in sulfur. And that makes it harder for your good state to meet strict air quality standards. That’s why clean coal technology is critical to the future of this country. It’s critical to the future of the state. It’s critical for the job creators of your state. It’s critical for the working people of your state. It’s critical for this country. When I ran for President in 2000, I pledged to invest $2 billion over 10 years to promote research into clean coal technologies. I kept my promise. My budget for 2006 brings clean coal funding to $1.6 billion over five years, and that puts us on pace to exceed my pledge by more than 50 percent.

And we’re doing some interesting things. We’re funding research into innovative projects, such as the process for converting coal into clean-burning gas. We’re taking coal, there’s a process that converts it into gas that burns cleanly. A company in Cincinnati is cooperating with a coal plant in New Mexico to eliminate almost all sulfur emissions and turn the byproduct into a usable fertilizer.

We’re developing technology so that we can build the world’s first coal-fueled zero emission power plant. I believe it’s possible.


To produce more energy at home, we need to open up new areas to environmentally responsible exploration for oil and natural gas, including the Arctic National Wildlife Refuge — that’s called ANWR. (Applause.) The Department of Interior estimates that we could recover more than 10 billion barrels of oil from a small corner of ANWR that was reserved specifically for energy development. That’s the same amount of new oil we could get from 41 states combined. We can now reach all of ANWR’s oil by drilling on just 2,000 acres. Two thousand acres is the size of the Columbus airport. By applying the most innovative environmental practices, we can carry out the project with almost no impact on land or local wildlife. And that’s important for you all to know.

You see, developing a small section of ANWR would not only create thousands of new jobs, but it would eventually reduce our dependence on foreign oil by up to a million barrels of oil a day. Congress needs to look at the science and look at the facts and send me a bill that includes exploration in ANWR for the sake of our country.


The third objective of a sound energy bill is to diversify our energy supply by developing alternative sources of energy.

  • Congress should provide tax credits for renewable power sources such as wind and solar and landfill gas.
  • Congress needs to continue strong support for ethanol and biodiesel.
  • To ensure a diverse energy supply, we need to promote safe, clean nuclear power.
  • Another vital energy project is the hydrogen fuel initiative. When hydrogen is used in a fuel cell, it has the potential to power anything from a computer, to a cell phone, to an automobile that emits pure water instead of exhaust fumes. At Battelle, engineers have found a way to use hydrogen fuel cells to power the electronics on a Bradley Fighting Vehicle. We’re providing $1.2 billion over five years to help move hydrogen-powered cars from the research lab to the dealership lot.


The final objective of a sound energy bill is to find better, more reliable ways to deliver energy to consumers. Some parts of the country, homes and businesses are receiving 21st century power through infrastructure that was made decades ago. Transmission lines and pipe lines and generating facilities are deteriorating. Different regions share electricity over unreliable transmission lines. These strains on the system lead to higher prices and they lead to bottlenecks in delivery. And just one piece of the power grid — if one piece fails, you in Ohio know the results: darkness across the map.

Congress can solve these problems in a few simple ways. Current law makes it optional, rather than mandatory, for power companies to ensure reliability across the electricity grid. Most of you consider it mandatory for the light to come on when you flip the switch. (Laughter.) Congress too needs to make sure that reliability on the electricity grid is mandatory, not voluntary, when it comes to our power companies. (Applause.)

We need to repeal the outdated rules that discourage investment in new power infrastructure. Incredibly enough, there’s a law on the books from the Depression that prohibits new investment when it comes to expanding the transmission of electricity. That needs to be repealed. I mean, we’re living in the 21st century. We’ve got a lot of work to do to make sure that we have reliable sources of electricity coming into our homes and to our businesses.

We need to make sure local disputes don’t cause national problems when it comes to developing an infrastructure. Federal officials should have the authority to site new power lines. Listen, we’ve got modern interstate grids for phone; we’ve got a modern connection with our highways; America needs a modern electricity grid, too, in order to make sure that we can compete in a global economy, in order to make sure people can find work.


Apr 20, 2005   Bush’s interview with Insana arretium

Insana: You’ve expressed your concern about rising oil prices. There are some people who worry that even as we wait for your energy bill to be passed we could see a $3 or $4 price-per-gallon for gasoline this summer. Before the bill passes, is there anything you can do to bring down the price so that it’s not going to be a burden to the average American come this summer?

President Bush: A couple of points on that. First, you know, it took us awhile to get to where we are today and it’s going to take us awhile to become less dependent on foreign sources of energy. Even signing an energy bill, you don’t have an instant fix. Secondly, I fully understand high gas prices is beginning to really pinch a lot of our fellow citizens, and that’s troubling. There are some things that we need to do in the energy bill, which is encourage more exploration, we need to look refining capacity — how do we help put regulations in place that will encourage construction of refineries so, at the very minimum, there’s a steady source of supply of gasoline. Thirdly, obviously, internationally I’ll be talking to our friends about making sure that they understand that if they pinch the world economy too much, it’ll affect their ability to sell crude oil in the long run.

[The high] price of gasoline should be a wake-up call to the United States Congress to get an energy bill passed that encourages conservation, encourages exploration for hydrocarbons in environmentally friendly ways, causes us to open up more portals for liquefied natural gas to come from around the world. I mean, there’s a lot of things we need to do. I am for safe nuclear energy expansion. I’m for clean coal technologies. I know ultimately the automobile manufacturers, if the marketplace so demands, are going to have to come up with a different mixture of fuels and automobiles.

Insana: Well, GM and Ford are getting hit pretty hard right now based on how gasoline prices are. Are you worried about what the impact of a weakened General Motors might be on the economy because oil prices and gasoline prices are so high?

President Bush: I think they’re going to have to learn to compete. In other words, if the consumer starts saying we want a different kind of automobile, they’re going to compete once again with, say, the Japanese automobile manufacturers to, to, to, to get a, to keep their lion’s share of market demand.

Insana: Can you try to relax the restrictions on reformulated gasoline? Could you release oil from the strategic petroleum reserve, or take some short-term measures should we see some sort of gasoline shock this summer?

President Bush: Well, you know, I, I — first of all, the SPRO was put in place for a national emergency. And that’s what it’s going to be used for. In terms of — we’re going to look at all regulations in terms of the manufacture of gasoline, refining of gasoline. Whether or not, you know, regulations that could prevent a refiner from expanding. The more supply there is of a, of, of a commodity, the, the, you know, it’s going to take pressure off of price. And we’ve got to look at ways to not only mitigate the regulatory causes of price, but also the regulations that will prevent, or discourage people from investing capital to create expansion of refineries.

Insana: Some of your loyal opponents on Capitol Hill today made some cynical comments suggesting that you don’t mind way high oil prices because they help some of your friends in the oil business. How would you respond to statements like that?

President Bush: I, I’m the president of everybody. And I — look, I go to Fort Hood, Texas, and I sit down at a table with a young solider and we’re talking about his tour of duty. And one of the first questions he asked me is what are you going to do about gasoline prices, Mr. President?

I mean, here’s a kid who has, you know, put his life on the line for our nation’s freedom and for peace and he’s worried about gasoline prices. ‘Course I’m worried about gasoline prices. And a high price of crude drives the price of gasoline.

And listen, I’ve been talking to Congress for three or four years now about getting a plan in place, getting a bill to my desk that reflects a comprehensive energy plan. And in all due respect to the members of Congress who are — might be somewhat critical of the administration, it’s time for them to stop debating and time for them to get a bill to my desk.

Insana: The government, whether it’s, you know, your administration or even the Federal Reserve, that inflation’s not a problem right now. And that’s true unless you are filling up your car, buying a house, now picking up a cup of coffee at Starbucks, sending your kid to school, or paying your doctor bills. Is inflation a problem for the average American that’s going unrecognized by the federal government?

President Bush: No, I don’t think so. Yes, I think inflation can be a problem for the average American, and no, I don’t think it’s going unrecognized. As a matter of fact, why I was so strongly for tax relief, you know, I, I, I want there to be more money in the pockets of the average American family. And, you know, some are talking about running taxes back up. I think it would be a huge mistake. I think it would hurt the economy, but more importantly it would hurt the average American family.

Insana: — African nations. Do you think the Chinese are trying to crowd the U.S. out of the energy markets? Because five, 10 years from now, their needs are going to be even bigger than our own.

President Bush: I don’t think there’s an economic war plan that would crowd the U.S. out of the energy market. I do think they’re trying to satisfy a huge appetite for a massive economy growth, a fast-growing economy. And I was pleased to see that they’re willing to build nuclear power plants. And I would hope India would do the same thing, these fast-growing under-developed economies. Because as they demand energy, it would be very helpful that a part of that demand is not in the hydrocarbon sector.

Listen, we’re all going to have to diversify away from hydrocarbons over time.

We’re just going to have to change our habits. 

The hydrocarbon society will still be with us, but it can’t be with us to the extent it is today.

[Hey preppers, check out the features of the Bush ranch house in Crawford, Texas ]

The Texas Two-Step. George W. and Laura Bush’s new Crawford, Texas home boasts a stunning array of eco-friendly features—perhaps not what you’d expect from one of the least environmentally friendly administrations since…um, creation. By Rose Marie Berger


The Bush ranch house in Crawford, Texas, balances beauty with state-of-the-art energy efficiency. Designed by Austin environmental architect David Heymann, and built by members of a religious community from nearby Elm Mott, George W. and Laura Bush’s dream home is built of a BTU-efficient, honey-toned native limestone quarried from the nearby Edwards Limestone Formation.

The passive-solar house is positioned to absorb winter sunlight, warming the interior walkways and walls. Underground water, which remains a constant 55 degrees year-round, is piped through a heat exchange system that keeps the interior warm in winter and cool in summer. A graywater reclamation system treats and reuses waste water. Rain gutters feed a cistern hooked to a sprinkler system for watering the fruit orchard and grass. Clearly, Bush goes home from the White House to a green house. [more]

http://www.nowra.org/?p=186 Western White House Turns Green with Innovative Onsite Treatment System by Melinda Suchecki

[MANY SNIPS] His 1500-acre ranch is located near Crawford, Texas, about 30 miles west of Waco. Aside from the gray and black water recycling and irrigation systems, the home features geothermal heating, active and passive solar energy, and a rainwater collection system with a 40,000-gallon underground cistern. The purpose of the cistern and a separate gray water system is for surface irrigation of fruit trees.

According to Ron, “We worked with the architects and plumbers to ensure that there was separation of the gray and black water lines and confirmed their separation prior to the pour of the slab. There was resistance at first on the part of the plumbers; however, once they understood what we were trying to do, everything went off without a hitch. One person told me there was ‘no way they would get it all right, it would be too easy to cross the lines.’ My response was, ‘Then how do they keep the hot and cold water separate?'”

The black water system features over 2000 gallons of pretreatment and equalization tanks which meter close to a 1000GPD Hoot Aerobic System. However, the treatment process doesn’t stop there. The effluent leaves the aerobic system through a Polylok Effluent Filter and enters a recirculating media filter, which acts like a sand filter. The effluent passes through a unique medium several times prior to discharge from the filter, where it passes through yet another media filter before entering the pump tank. “With this design, we were able to incorporate the high efficiency of an extended aerobic system with the startup and shock load capability of a sand filter. However, the established aeration system will prevent the potential plugging effect seen in sand filters because the water enters in 95% reduced of both BOD and TSS.”

The effluent leaves the recirculating filter and is stored in a pump tank. The Hoot Control Center operates the Lighthouse Beacon Filtration System. The filter not only performs effluent filtration, but automatically back-flushes and performs scheduled field flush cycles as well. The effluent is filtered through the 3-dimensional, 100-micron filter before being pumped 350 feet away to a four-zone drip irrigation field. The drip tubing is Netafim Bioline .62 GPH and features a pressure-compensating emitter design. The pressure-compensating design ensures even distribution throughout the entire field. The zones are automatically advanced each time the system doses, ensuring even distribution. If low levels of water usage are observed, the system can utilize just one zone to encourage plant growth.

Further complicating the design was the system location. If the system was to gravity flow, it would require all the treatment equipment to be placed right out-side the bedroom of George and Laura, between them and their new 7-acre lake. This proved to be unacceptable.

The system needed both gray and black water lift stations from the main house to pump to the location of the equipment, over 500 feet away behind the garage. The guest house gravity flows to the system. All of the controls are remotely mounted inside a specially designed utility room inside the middle of the garage. Over two miles of wiring were used to complete the remote location project.

Each tank has duplex pumps and a separate, independent alarm circuit that goes to an alarm system control panel. The system has the ability to remotely alert if one of the duplex pumps fails, latch to the next, then independently alert of a high water situation. This system is in every tank, and works even in the event of a power failure. The system is remotely monitored by an alarm company that can tell service personnel exactly what the problem is and a determination can be made if it requires immediate attention, or if a problem can wait until the next day. For example, if one of the pumps in the recirculation system has failed, then it may not require immediate attention. “If there is a high water level in the lift station on the main house,” Ron asserted, “well, there will be three of us racing to see who gets out there first.”

The Hoot systems, lift stations, and standard as well as custom tanks to complete the project were all pre-cast concrete, made by CPI of Waco, Texas. Mark Kieran of Brazos Wastewater was the installer of the system, with the majority of the hookup being completed by Ron, Jim, and Jim’s father, Frank Prochaska, from Lorena, Texas.

The incorporation of an innovative onsite wastewater strategy is a testament to the acceptance of onsite as a long-term treatment solution. The Bushes’ incorporation of environmentally sensitive approaches to their new home is an example of what individuals can do to create a better place for us all to live.

Also see:




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Former President Bill Clinton on Peak Oil, Peak Soil, and other depleting resources

Former President Bill Clinton. May 4, 2007. The Looming Crisis; Can We Act in Time? Harvard Kennedy School.

Excerpts from Keynote Address by Former President William Jefferson Clinton Kennedy School Spring Conference – Cambridge, MA

I think it is highly likely that before we see the worst consequences of climate change, we will reap the consequences of the combined impact of resource depletion and population explosion. It is projected that the world will grow from six and a half to nine billion in the next 43 years, by 2050 – with almost all the population growth coming in the countries least able to handle it.

Meanwhile, if you look around the world we have substantial loss of topsoil, substantial loss of forest cover, and certainly the biggest loss of plant and animal species in human history – for the last 150,000 years – and many people think for the last half million years. This is a combustible mix. It raises the prospect of places all over the world having a modern version of that old Mel Gibson – Tina Turner Road Warrior movie.

When you put climate change in that with agricultural production shifting, it’s a powerful mix. A small but increasing number of petroleum experts believe we only have 35 to 50 years of recoverable oil left. And the optimists say we’ve got 150 years left—but most of the other optimists say 100 years. Now let me remind you, the oldest city on Earth by carbon dating, that we know of, is Jericho in the Holy Land. It’s 10,000 years old so we’ve got 1% of civilization to figure out how to do without oil.

And there’s almost no discussion given to this in public circles today.

It is, as far as I know, not part of the debate in the campaigns in either camp. We Democrats want to conserve, and the Republicans want to drill ANWR, and there’s a debate about what we should do with nuclear power. And nobody’s really looking at what we would do if we put anything like the money, time and effort into solar, wind, other clean technologies and a massive efficiency effort. So we’re trying to push that debate.

But nobody’s really talking about the resource depletion issue. And when you put it against population —- let’s just take farming. In the last decade, the United States, Canada, the breadbaskets of Europe, the major rice producers in Asia – they all held their own. But the only place on Earth that grain production increased significantly was Brazil and Argentina where they have 22 feet of topsoil. They still have the best topsoil on Earth. No place else was there a substantial increase in grain production.

Those places are impressive, but Brazil already is under stress and a big argument about tearing down the tropical rain forest, by the way which almost never yields good topsoil—-it’s normally a terrible mistake—-but the rest of the country has massive topsoil.

There’s no way in the world they can grow enough extra food to feed two and a half billion [more] people.

Unless you want to see sweeping epidemics of infant mortality rising again, children dying before they’re a year old. And I’m not even talking about AIDS, TB, malaria, infections related to dirty water, all the current disasters. I’m just saying this is coming. And I know there’s no great political constituency for it, but we can avert some of these things for not very much money if they can be put into the public debate and people understand clearly what’s going to happen. I think that’s quite important.

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Congressional hearing on transportation – industry and agricultural perspectives

House 113-36. October 1, 2013. Perspectives from users of the nation’s freight system. U.S. House of Representatives.

The United States manufacturing sector employs over 12 million people and contributes almost $2 trillion in goods and services to the Nation’s economy annually. The Nation’s agriculture industry employs over 16 million people and contributes nearly 750 billion dollars to the Nation’s annual gross domestic product. Taken together, the manufacturing and agriculture industries represent almost one-fifth of the annual gross domestic product. Both of these industries rely intrinsically on a highly functioning, efficient, and safe freight transportation network. For manufacturing and agriculture businesses to be successful and remain competitive with international competitors, we must maintain and improve our infrastructure to keep pace with growth in these sectors.

Comparing the costs of transporting soybeans to China from the United States and to China from Brazil illustrates the critical role that the Nation’s freight system plays in the global competitiveness of American industry. Currently, it costs $85.19 to transport one metric ton of soybeans from Davenport, Iowa, to Shanghai, China. It costs $141.73 to transport the same amount of soybeans approximately the same distance to Shanghai from North Mato Grosso in Brazil. The United States currently enjoys a competitive advantage because the Nation’s freight system is more efficient and cost effective than Brazil’s system. However, Brazil is planning to invest $26 billion to modernize its freight facilities.

How the Manufacturing Industry Relies on the Freight System. The manufacturing industry relies on all modes of transportation in a variety of ways. Manufacturers rely on the freight system to deliver the raw materials and parts necessary to produce goods as well as to deliver the finished goods to market. Manufacturers often have unique freight transportation needs depending on the particularities of the goods being produced. Some manufacturers produce goods that must remain at a specific, constant temperature, some produce goods that are extremely heavy and oversized, some produce goods that are volatile or hazardous in nature, and some produce goods that must be consumed within a limited window of time.

How the Agriculture Industry Relies on the Freight System . The Nation’s agriculture industry depends on all modes of the freight transportation system to deliver goods and food products to urban centers, export facilities, and other consumer regions, most of which are a significant distance from the area where the food is grown and produced. Farmers require an efficient transportation network to deliver equipment, feed for livestock, seeds, and fertilizer so that they can produce the foodstuffs that will then enter the stream of commerce along the Nation’s roads, rail, and waterways. Raw agricultural products must also be transported to processing facilities before being repackaged and shipped to another destination. The agricultural sector is the largest single user of the Nation’s freight transportation system, accounting for approximately one-third of all ton-miles.

Aside from the general issues related to a supply and demand market for agricultural commodities, transportation costs are the most significant factor impacting the bottom line for farmers and other participants in the agriculture industry. Due to the time-sensitive nature of the harvest period, farmers rely on a high level of efficiency and capacity in the Nation’s freight system so that they can get their goods to market quickly.

The purpose of today’s hearing is to hear from those who are actually producing and growing the goods that are shipped on the Nation’s freight transportation system. The manufacturing and agriculture industries represent almost one-fifth of the Nation’s annual gross domestic product. Freight transportation measured by tonnage expected to increase by 88 percent by 2035. I hope the irony is not lost on my colleagues that these witnesses are testifying about the importance of the Federal Government in the middle of a Republican Government shutdown. These witnesses discuss the importance of the Army Corps of Engineers and the Service Transportation Board while those agencies are now shutting down because of the Republican leadership’s insistence on stopping the Affordable Care Act at the expense of everything else.



IP is the largest paper and packaging company in the world. We have 70,000 employees around the world, and here in the United States, we have 38,000 employees who work at over 300 facilities in 43 States.

I want to be clear that although I will not touch on rail issues today, International Paper is also a significant user of rail and moving our products by rail remains a critical part of our supply chain. International Paper is the rail industry’s largest U.S. box car customer, shipping more than 140,000 carloads by rail in 2012. We are also the third largest waterborne exporter of containers from U.S. ports by volume. In 2012, International Paper shipped more than 2 million tons in containers equating to 160,000 TEU’s – the standard maritime industry measurement for containers – as well as over 1 million tons of breakbulk cargo from U.S. ports. Trucking is also critical for International Paper. We sent products from our U.S. facilities to customers over more than 155,000,000 miles by truck in 2012.

While we are a significant player in all of these transportation modes, International Paper has identified an opportunity to increase trucking efficiency by 20% for 300,000 of our trucks trips each year while still maintaining safety standards. International Paper strongly supports the Safe and Efficient Transportation Act (SETA), HR 612, which allows each state to permit six-axle trucks loaded to weights of up to 97,000 pounds to operate on the state’s Interstate Highway system.

Our average rail shipment from our mills is over 800 miles, while our average truck shipment from the mills is approximately 400 miles.

International Paper ships 70% of our exports out of the Ports of Charleston, South Carolina and Savannah, Georgia. Both ports are working tirelessly to move forward on projects that will increase their harbor depths to handle the larger vessels, which will ensure their global competitiveness and improve the flow of American goods to global customers. If the Ports of Charleston and Savannah cannot handle the larger ships in 2015, International Paper we will be forced to redirect our exports to other U.S. ports that can accommodate the larger ships, or sharply reduce our exports. That would be counterproductive to current national efforts to grow U.S. exports and wreak havoc on our company’s business plans and logistical operations. If we are forced to identify new ports because Charleston or Savannah cannot receive the larger ships, International Paper would potentially have to export this tonnage out of Norfolk, Virginia or Miami, Florida. You can appreciate the additional miles that our products would have to travel by truck and rail to get to those ports. Every extra mile raises our costs, which hurts our global competitiveness, and adds to the strain on our nation’s infrastructure.

Implementation of both of these port projects is important not just for International Paper, but also critical for the health of the U.S. economy and the nation’s movement of goods. We understand that the total economic impact of Georgia’s deepwater ports is $67 billion, plus $4.5 billion in federal taxes. According to a South Carolina State Ports Authority Economic Impact Study report, the Port of Charleston facilitates over $44.8 billion in total economic output, annually, of which $11.8 billion is paid in wages to 260,800 employees in South Carolina. I urge the Freight Movement Panel to support the funding of these types of critical harbor deepening projects so that they can be turned into realities.

IP is a leader in—of major consumer of freight and logistics here in North America. We spend about $2 billion. We are the number one shipper of boxcars on the rail system. We export almost 4 million tons of product outside of North America. Two million tons goes out in containers and over a million goes out breakbulk.

Ports are very important to us. And we also ship products over 155 million miles around the North America system by truck. So we are here to ask for your help in addressing the freight transportation needs here in North America. I am going to cover two areas of competitiveness for truck and ports.

Paper is heavy. Our trucks typically weigh out before we cube out. And with 300,000 trucks going over the road, it does not make a lot of sense to us to ship trucks with 10 feet of empty space when there are safe alternatives to increased truck—truck weight here in the United States. So we are here to—I am here to talk about SETA, the Safe and Efficient Transportation Act, which would allow trucks with a sixth axle and braking system to increase the truck weight up to 97,000 pounds at the option of the States on interstate highways. That would enable us to take about 20 percent of our trucks off of the road as well as make us more competitive. If the Oklahoma DOT opted in, we could reduce our truck trips by over 5,000 trucks a year, reduce vehicle miles by 1.8 million miles,

So we are very much in favor of this. It is not a rail-versus-truck issue. Those are two different fact patterns. Trucks are for, in our case, under 400 miles; rail averages over 800 miles. So we simply want to make trucking more competitive.

We ship 70 percent of our exports out of the ports of Charleston and Savannah. And in 2015, the Panama Canal will be reopened and be able to handle wider ships. And both of these harbors have to be dredged to accommodate the draft of the larger ships, they have to pick up an extra 3 to 7 feet. Both are important to us, with over 2 million tons. If we cannot use these harbors, we are going to have to put product on rail and truck and ship further, either to Miami in the south or Norfolk in the north.

Harbor deepening is important to the health of the U.S. economy as well as the movement of goods. And it is important to industry who wants to export out of the United States. So we urge the panel to support the harbor dredging projects at those ports.

Mr. NADLER. Mr. Kadien, in your testimony, you advocate for dramatic increase in truck weights to 97,000 pounds. Now, we know that interstate bridges cannot withstand the stress that 97,000 pounds will cause, even with the addition of a sixth axle. These trucks will accelerate the depreciation of and further worsen the condition of our Nation’s bridges.

Your written testimony mentions a mill in Valliant, Oklahoma. I would like to recall comments made at a field hearing in 2011 by Oklahoma DOT Secretary Ridley and former Oklahoma Secretary McCaleb. They each made the point that we must proceed with caution in higher truck weights because the potential damage to bridges. To quote Secretary McCaleb, ‘‘No matter how many axles you put under that essential point, loading will increase the stress repetition and the rate of stress repetition and will reduce the life of the bridge. I am an advocate of heavier loads,’’ he said, ‘‘but you have to design for those heavier loads. You can’t just superimpose those heavier loads on a system that wasn’t designed for them.’’ According to the Federal Highway Administration, Oklahoma has 5,382 bridges that are structurally deficient. Do you dispute the fact that heavier trucks will cause accelerated damage to bridges?

Mr. KADIEN. Absolutely don’t dispute that. And that is why this is really a States rights issue. It is for the States to decide which roads and which bridges will handle the 97,000 pounds.

Mr. NADLER. I find it very difficult to accept that any of these questions are primarily States issues, given the fact the Federal Government paid 90 percent of the cost of the construction of the interstates and pays a very large proportion of the ongoing maintenance costs of the interstate. It is certainly a Federal as well as a State’s issue. So you think that the 97,000-pound truck should only be allowed on bridges specifically designed for 97,000-pound trucks?

Mr. KADIEN. Yes.

Mr. NADLER. What percent of the bridges in the United States were specifically designed for 97,000-pound trucks?

Mr. KADIEN. I don’t know the answer to that question

Mr. NADLER. It is rather small.

Mr. KADIEN. Fifteen States allow the heavyweight trucks right now.

Mr. NADLER. But the fact that a State follows a foolish policy doesn’t mean that we should. In the truck study in Vermont it was determined that a fully loaded 80,000-pound, 5-axle combination truck incurs 21.5 cents of pavement cost per mile on the interstate system and 32.9 cents per mile on other highways. A typical 99,000-pound, 6-axle vehicle requires pavement expenditures of 34.5 cents per mile of travel on the interstate system compared to 21.5 cents for 80,000 pounds, and about 53.6 cents per mile of travel on non-interstate roads.

This is 63% more per vehicle mile and 32% more per ton-mile than a fully loaded 5-axle vehicle. Do you think that the 97,000-pound truck should pay 63-percent more tax than an 80,000-pound vehicle? And if not, why not?

Mr. KADIEN.  I am not familiar with the study. But, no, I don’t think so.

Ms. BROWN. Mr. Kadien, what do you mean by States rights when the Federal Government pays 90% of building and maintaining the bridge and the State put up 10 percent? [On top of that], in 2012, 6,749 bridges were rated as structurally deficient.

Mr. KADIEN. What I mean by States rights is to allow the State to decide based on the traffic and the industry in that State, and the studies of their own departments of transportation is to choose which State highways that they would allow the 97,000-pound, six- axle truck to travel on.

Ms. BROWN. So you don’t think the Federal Government should play a part in deciding?

Mr. KADIEN. I think the States are in the best position to decide which roads and bridges should or should not be part of the program.


Mr. Edmond Johnston from DuPont

DuPont operates more than 70 manufacturing facilities in the United States, and employs thousands of Americans while purchasing $550 million in transportation services each year.

I would like to address three critical freight transportation issues. First, funding for infrastructure. Much of our transportation infrastructure is old. If America’s manufacturers are to continue to move goods safely and reliably over the country’s freight infrastructure, upgrades are sorely needed.


Mr. William Roberson from Nucor Steel

Nucor Corporation is the Nation’s largest steel manufacturer and recycler, operating 23 scrap-based steel mills. Nucor has the capacity to produce more than 27 million tons of steel annually. Last year, our company recycled more than 19 million tons of scrap steel.

The freight transportation system is vitally important to Nucor’s success. We rely on water, rail, and truck transportation to move millions of tons of scrap steel and other raw materials to our steel mills and finished products to market. For this reason, disruptions in the freight transportation system can have significant negative economic impacts on our business. Waterways play a particularly important role for a number of our Nucor divisions. We have several steel mills located on rivers, and some of these mills bring in more than 90 percent of their raw materials by river. Nucor scraps steel business, the David J. Joseph Company, transports approximately 3,500 barges per year of scrap steel. When assessing our waterways system, we believe that more frequent maintenance dredging is needed to maintain adequate drafts. Unfortunately, inadequate drafts levels are becoming an all too common occurrence. For every 1 inch decrease in draft, you lose 17 tons of cargo on a barge. This forces companies like ours to use more costly alternatives.

Barges are a safe, efficient, environmentally friendly, and cost-effective way to move goods. Each barge moves 15 to 1700 tons of cargo compared to 80 to 100 tons on railcars or 20 to 22 tons on trucks. Considering the importance of our waterways system, we are encouraged to see both Houses in Congress advance the Water Resources Development Act. Nucor supports this legislation, particularly dedicating more revenue in the Harbor Maintenance Trust Fund for the purpose of maintaining our Federal navigation channels.

We hope that Congress will also strengthen revenues for the Inland Waterways Trust Fund to make necessary investments in this critical component of our U.S. supply chain by advancing the industry-supported user fee increase. Like our waterways, our roads and bridges are in serious need of investment. The Interstate Highway System, built after World War II, is aging, and we need a new, long-term commitment to invest in our roads and bridges. The gas tax is not providing adequate revenue to further this goal. We need to look for new alternatives, including more public-private partnerships. Also enacting legislation giving States the option to increase the weight of six-axle trucks operating on select Federal interstates would allow more cargo to be moved safely and efficiently over our Nation’s railways.

In recent years, the rail industry has seen significant private investment. However, these investments are often passed on to the rail industry’s customer base, resulting in higher premiums and costs for our captive shippers who are still without the ability to choose which rail carrier we use.

We cannot pass these increased costs on to our customers. We have to absorb them because we compete in a steel market that is being flooded with illegally subsidized foreign products that are often already sold below cost. While it is true that we have the ability to use less costly modes of transportation, it is not always feasible logistically.

As the National Association of Manufacturers recently noted, manufacturing produces 12 percent of America’s GDP, but the U.S. is only investing about 1.7 percent of our GDP back in infrastructure. Many of the countries we compete against are investing between 5 to 10 percent of GDP in their infrastructure. In short, others are modernizing while we are struggling to maintain a failing system that is decades old.


Bill J. Reed Vice President, Public Affairs Riceland Foods, Inc.

Mid-South farmers plant about half of the nation’s rice crop on 1.5 million acres and produce around 240 million bushels, or 10.8 billion pounds, of rough rice with the hull intact.

Our farmers also produce soybeans, and many grow com and winter wheat which are marketed by the cooperative. In total, we market annually 100 to 125 million bushels of grain.

Besides our rice business, we crush soybeans grown by our farmer-members to produce high protein soybean meal for the region’s poultry and aquaculture industries. We refine crude vegetable oils to produce a line of frying and cooking oils for foodservice and ingredient customers. Soybeans in excess of our crush capacity generally are sold down the Mississippi River and into export markets. We do not process wheat or com, but sell them to feed mills or to the export market. Transportation is a key part of what we do every day as we move to market the products and grains our farmers produce. In our most recent fiscal year, completed July 31, our transportation team accounted for moving more than nine billion pounds of products, supplies and commodities. That does not include transportation of the seed, fertilizer, equipment and other inputs required for our farmers to grow their crops.

The largest share of our freight is transported on highways. Last year we accounted for nearly 140,000 truck and intermodal shipments in the domestic market for which we pay the freight or handle the logistics. We counted 6,300 rail shipments; well over a thousand export containers and break bulk loads; and more than 200 river barge loads of products. With the nation’s focus on a fresh, safe food supply and just-in-time manufacturing and shipping, it is imperative that products move within a narrow time frame. To accomplish this economically requires a reliable and efficient transportation system.

U.S. rice is produced in three primary areas: California; the Texas and Louisiana Gulf Coast; and the Midsouth, which includes parts of Arkansas, Missouri, Mississippi, and Louisiana.

Each fall, Riceland members harvest their crops and deliver them to local grain elevators, where the crops are dried and stored until transported to processing facilities for milling and packaging. Storage facilities are scattered throughout the region, as are our processing facilities,

Riceland is the largest rice miller and marketer. The co-op also markets soybeans, corn, and winter wheat that our farmers produce. Each year we handle 100 to 125 million bushels of grain.

Our rice products are sold across the country in retail and club stores and to food service establishments and food companies. Riceland is a direct exporter, selling rice to 50 foreign destinations. In our last fiscal year, we moved more than 9 billion pounds of products, commodities, and supplies. We did this with nearly 140,000 truck and intermodal shipments, 6,300 rail shipments, more than 1,000 export containers, and more than 200 river barge loads.

With the Nation’s focus on a fresh, safe, and abundant food supply, we must have a reliable and efficient transportation system.

In 2011, Arkansas voters supported a $575 million bond program for interstate improvements. And in 2012, they approved a half cent sales tax to fund $1.8 billion in additional highway improvements. Of course, these efforts aren’t enough. It was reported in September that 156 bridges in Arkansas had been found structurally deficient. Many are in east Arkansas where our Riceland farmers grow food. Railroads focus on long hauls now, and they are certainly important to us. We ship railcar loads of rice all over the country and unit trains of wheat to Mexico. River transportation is critical to our export business.

Our New Madrid, Missouri, facility, on a good day, can receive rice from our farmers, mill the rice, and convey it directly to a barge for shipping down the Mississippi River. In 2011, however, flood waters on the Mississippi made it impossible to load barges.

In fact, water was within a foot of entering the processing facility. In 2012, and again this year, it is a whole different story. With silt naturally flowing into the harbor and displacing water, we can load less rice into each barge.

The harbor now looks more like a mud puddle than a harbor. The New Madrid harbor is not scheduled to be dredged this year. We expect low water levels in the harbor next summer to eliminate practically all of the economic benefit of using the facility for bulk barge shipments.

As corn harvest was underway in early August last year, we had thirty 18-wheelers carrying corn scheduled to unload directly into barges at the Port of Yellow Bend, Arkansas. Then we learned that silt had filled the harbor, making it unusable. The dredge was heading from upriver at Rosedale, Mississippi, down to Lake Providence, Louisiana, without stopping at Yellow Bend, Arkansas. Building temporary corn storage and forfeiting sales contracts would have cost our Riceland farmers at least $1 million. As many as 200 farm families would have been impacted, 15 port employees would have lost their jobs, and the port would lose $500,000 in revenue. Thanks to Congressman Rick Crawford and Senators John Boozman and Mark Pryor of Arkansas, the Army Corps of Engineers redirected the dredge to Yellow Bend. In just a few days, the harbor was open and those corn barges were filled.

I share these examples to illustrate the importance of keeping all segments of our transportation system, highway, railroads, and rivers operating in efficient and effective manner. The U.S. transportation system is critical to U.S. competitive advantage in moving agricultural and food products across the country and around the world. It benefits every American.

We export a fourth to a third of our rice production every year at Riceland. For the U.S. industry as a whole, about half of the crop is exported each year to about 75 countries. Rice is a staple for at least half of the world’s population. They eat it every day if they have it. We have all seen the numbers of population growth. By 2050 we may expect about 9 billion people, which are a lot of mouths to feed, and rice does that very efficiently. So we have seen a period of several years here of good prices for agricultural commodities really across the board. We certainly hope that continues. But there is always competition from other countries. Asia, for instance, had been deficit of rice. Now, many of the Asian countries are exporting rice. In fact, when I started with the co-op we were the number one exporter, we as in the U.S. were the number one exporter of rice. Today that spot would be filled by India, and followed by Vietnam and Thailand and other southeast Asian countries which have picked that up. Many of those are moving rice around the world at heavily subsidized prices, which makes it very difficult to compete. And, again, our transportation infrastructure is one thing that keeps us in the hunt for some of that business, especially the higher valued business.

We are seeing rice from Asia moving into this hemisphere, into Central America, the Caribbean, even into the United States. And that is a concern because of their lower cost of production. We are also watching South America. If those fellows had the opportunity to have the type of delivery system that we have in the U.S., American agriculture would be in trouble. Production in Brazil is just amazing. Where we have the advantage is in our transportation system. But we are going to have to continually improve to stay competitive and keep our farmers in business

Much of the transportation system was built to move products to market. In fact, our facilities were located on rail lines, and at one time the crops were actually railed to processing facilities from the grain storage facilities out in the countryside. None of that is done today because of the emphasis on the long hauls. As far as our largest concern, we have learned to cope with trucking grain from the farm to our facilities. Our farmers are responsible for doing that. It is fast, and that is important for them during harvest when they are facing weather issues. We move products in all forms. But I would say our biggest concern is those harbor situations where we just cannot load barges to move rice into the export market. That is done by barge down the Mississippi River to New Orleans and then put on the large oceangoing freighters, but we have got to get the product out of the port. In the case of our New Madrid facility, which is the only processing facility we have on a river, we have no storage for a processed product.


Mr. DUNCAN. Just out of curiosity, you know, I meet with people all the time from every business, every industry. I met, I guess last week or a couple of weeks ago, with some car dealers from Tennessee, and they said that while they are doing good business right now, it all seems to be pent-up demand, that people are driving cars now 100,000, 200,000 miles, not trading as often, and that they went for several years during the downturn without trading in a car. In other words, they are saying they don’t think the economy is as strong as current sales might indicate. And I read all these business some articles saying that things are going pretty good. You can find many that say they are not going pretty good. Our unemployment is too high. Our underemployment is much, much higher. Mr. Kadien, what about International Paper? How are you doing? What do you see in the near term for your company and the overall economy?

Mr. KADIEN. We are in several lines of businesses that are pretty good barometers of economic activity. We are the largest producer of corrugated packaging that moves goods, consumables, durables around the country, and typically runs about half of the GDP rate of the country. And right now we would say that the economic activity is pretty underwhelming, that, you know, we are looking at 0.5 to 1% growth rates across the industry, and that is really not reaching our potential. I have got a consumer packaging business, and food processors are seeing flat to no growth. We are a big supplier to restaurants. They are seeing slow traffic compared to prior years. I would say, it feels like we are moving sideways right now instead of gaining any momentum.




Edmond Johnston, III Transportation Policy Leader DuPont

The industry ships a wide range of materials from plastic pellets to commodity chemicals that are used to produce more than 96% of all manufactured goods. ACC represents the nation’s leading companies in the business of chemistry, a $770 billion industry and one of America’s most significant manufacturing industries. It is one of the largest exporting sectors in the United States, accounting for 12% of U.S. exports.

The Nation depends on the chemical industry every day for the building blocks that are necessary for safe drinking water, life-saving medications and medical devices, and a safe and plentiful food supply.

Chemical producers are the second largest customer of the nation’s freight rail system and rely on railroads to deliver chemicals efficiently and safely to where they are needed – from water treatment plants to farms and factories. Infrastructure Funding American families enjoy the necessities and luxuries of life only to the extent that goods move safely and reliably over the Nation’s transportation infrastructure.

Much of our transportation infrastructure is old and requires attention. Highways, bridges, ports, locks and dams are in need of repair, improvement or replacement. This includes dredging to maintain the use of ports and navigable waterways to keep these vital routes open for business.

For example, the Mississippi River is a critical national transportation artery, on which hundreds of millions of tons of essential commodities are shipped, such as com, wheat, oilseeds, coal, petroleum and chemicals. The historic low-water levels of the Mississippi River last year jeopardized the shipment of these essential goods threatening to disrupt manufacturing industries and power generation and put thousands of jobs at risk. This potential crisis demonstrated the important role of the U.S. Army Corps of Engineers in keeping goods flowing through our waterways.


Rob Roberson Nucor Corporation

Waterways playa particularly important role for a number of Nucor Divisions. We have several steel mills located on rivers and some of these mills bring in more than 90 percent of their raw materials by river. Nucor’s scrap steel business – The David J. Joseph Company – transports approximately 3,500 scrap barges per year. When assessing our waterways system, we believe that more frequent maintenance dredging is needed to maintain adequate drafts. Unfortunately, inadequate draft levels are becoming an all too common occurrence. For every one inch decrease in draft, you lose 17 tons of cargo On a barge. This forces companies like ours to use more costly alternatives. Barges are a safe, efficient, environmentally friendly and cost-effective way to move goods. Each barge moves 1500 to 1700 net tons of cargo, compared to 80 to 100 tons for railcars and 20 to 22 tons for trucks.

Like our waterways, our roads and bridges are in serious need of investments. The interstate highway system built after World War II is aging and we need a new, longterm commitment to invest in our roads and bridges. The gas tax is not providing adequate revenue to further this goal. We need to look for new alternatives, including more public-private partnerships. Also, enacting legislation giving states the option to increase the weight of six-axle trucks operating on select federal interstates,

With regard to our nation’s rail system, the biggest challenge that we face is that we are served by a single major railroad. Several Nucor facilities are “captive” shippers in that they pay a premium to move their products because of the lack of rail competition. In recent years, the rail industry has seen significant private investment. However, these investments are often passed onto the rail industry’s customer base, resulting in higher premiums and costs for captive shippers who are still without the ability to choose which rail carrier they use. We cannot pass these increased costs onto our customers. We have to absorb them because we compete in a steel market that is being flooded with illegally subsidized foreign products that are often already sold below cost. While it is true that we have the ability to use less costly modes of transportation, it is not always feasible logistically. Given these circumstances, we support action to address the need for more competition for rail service in many parts of the country. The creation of this special panel acknowledges that our freight infrastructure works collectively as one system. We cannot look at each in isolation. Businesses across the country rely on all modes of transportation operating together to get products to market.


Edward R. Hamberger President and Chief Executive Officer, Association of American Railroads

“Agriculture and Railroads: Maintaining a Track Record of Success.” The study, which was commissioned by the Soy Transportation Coalition, stated: U.S. freight railroads are essential to the viability and profitability of the U.S. soybean industry. Most of the leading soybean producing states even those with river access – significantly depend on the rail industry to satisfy customer demands. As more soybean production occurs in western states and as export terminals at Pacific Northwest ports increasingly position themselves to address growing demand from Asia, the dependence on rail will likely become more pronounced.

Our nation’s freight railroads do a remarkable job in meeting the needs of an extremely diverse set of shippers. On any given day, hundreds of thousands of rail cars are moving to and from thousands of origins and destinations. The vast majority of these shipments arrive on time, in good condition, with reasonable levels of service, and at rates which shippers elsewhere in the world envy. Today, America has the safest, most efficient and cost-effective freight railroad industry in the world.

Toward this end, policymakers should retain the existing balanced regulatory structure at the Surface Transportation Board (STB) that protects rail shippers against anticompetitive railroad conduct and unreasonable railroad pricing while allowing railroads to determine the most efficient routes to use and what services to offer, and to set prices that reflect the marketplace.

Of related importance in maintaining a world class freight rail system, AAR believes that policymakers should fully consider the impacts and costs of operating heavier trucks on the nation’s highways and bridges before considering any changes to those limits. Premature congressional support for trucks weighing as much as 97,000 pounds holds the potential to exacerbate damage to our roads and bridges, while diverting freight cargo away from railroads and adding to highway congestion and pollution. Most importantly, increasing truck weights without a commensurate increase in highway user fees would place railroads, which are investing record levels of private capital into their networks, at a competitive disadvantage.

AAR Perspective on the Need for Balanced Regulation

Today’s balanced regulations work extremely well- for railroads, their customers, and the country at large. After decades of decline, attributable in large measure to overregulation for much of the 20th century, enactment of the Staggers Rail Act of 1980 ushered in a new era. By passing Staggers, Congress recognized that America’s freight railroads the vast majority of which are private companies that operate on infrastructure that they own, build, maintain, and pay for themselves face intense competition for most of their traffic, but excessive regulation had prevented them from competing effectively. To survive, railroads needed a common-sense regulatory system that would allow them to act like most other businesses in terms of managing their assets and pricing their services. The Staggers Rail Act has been a tremendous success. Since it passed into law, average rail rates have fallen 42%, railroads are far safer than ever before, rail traffic volume has nearly doubled, and railroads have reinvested $525 billion in private funds, not government money growing and modernizing this country’s rail network. That’s more than 40 cents out of every rail revenue dollar. Indeed, railroads have heeded President Obama’s call for U.S. companies to “get off the sidelines and invest.” In 2012 alone, the Class I railroads invested a record $25.5 billion back into a world class rail network that keeps our economy moving. Railroads are projecting similar investment levels in 2013. As America’s economy grows, the need to move more people and goods will grow too. Recent forecasts reported by the Federal Highway Administration found that total U.S. freight shipments will rise from an estimated 17.6 billion tons in 2011 to 28.5 billion tons in 2040 a 62% increase. Railroads are getting ready today to meet this challenge. They will continue to reinvest huge amounts back into their systems, but if the United States is to have the optimal amount of rail capacity for the nation’s economy, keeping reasonable regulations must be part of the mix.

At a time when the pressure to reduce government spending on just about everything including transportation infrastructure is enormous, it would make no sense to enact public policies that discourage private investment in rail infrastructure that boost our economy and enhance our competitiveness. Punitive regulatory changes at the STB would have the effect of reducing railroad earnings and cutting return on investment, leading to disinvestment in the railroads’ networks, reduced capacity and less reliable service. In the end, these changes would cause the rail sector to either shrink or to seek government subsidies.

The huge public benefits associated with moving more freight by rail are clear. Because railroads, on average, are four times more fuel efficient than trucks, less fuel is consumed. Reduced fuel consumption means less pollution. And because a single train can carry the freight of several hundred trucks, carrying freight by rail means less congestion on the nation’s highways and fewer public dollars needed to build and maintain those highways.


Preemptive Attack on Study of Impacts and Costs of Heavier Trucks

Notwithstanding the critical importance of a world class freight rail system to its business, one witness at the hearing testified in favor of preempting a congressionally required study of the impacts and costs of operating heavier trucks on the nation’s highways and bridges. In particular, Mr. Kadien called upon the Panel to include a recommendation raising truck weights to 97,000 pounds in its upcoming report to the full House Committee on Transportation and Infrastructure.

AAR Perspective on Truck Weight Issues

The International Paper proposal would increase maximum truck weights by more than 20 percent. Doing so would likely cause far more damage to our nation’s already overburdened roads and bridges. As it is, the fuel and other taxes and fees devoted to highway construction and maintenance that heavy trucks pay fail to cover the costs of the highway damage caused by trucks. Previous studies have found that trucks only pay for about 80 percent of the damage they cause to our highways. The shortfall estimated at $2 billion or more per year has to be covered by other taxpayers. Allowing heavier trucks on our highways would make this disparity even more egregious and force taxpayers to reach even deeper into their pockets. The massive economic toll of heavier trucks would likely extend to communities and commerce as well. Roads and bridges are built to sustain existing vehicle weights, and many are crumbling even under current circumstances. One in every four U.S. bridges is already structurally deficient or functionally obsolete, according to the Federal Highway Administration. Repairing these structures would cost nearly $200 billion, without accounting for the added extensive damage brought on by even heavier trucks. The additional cost of repairing bridge damage caused by raising truck weights to 97,000 pounds could be as much as $65 billion, according to the Department of Transportation. Raising truck weights to 97,000 pounds could also result in eight million additional truckloads on U.S. highways, academic studies show. Our roads key arteries of our national infrastructure cannot weather this sort of damage.

Another aspect that should not be overlooked is the potential for increased truck weight limits to financially cripple many of the over 500 short line freight railroads across our country. These smaller, Class III freight carriers provide a critical “first – mile, lastOctober 16, 2013 Page 5 mile” connectivity between many rural (and often agriculturally focused) areas of our country and the national rail freight network. It has been well demonstrated, both in actual practice in states that have increased truck weight limits on local highways and in rigorous modal diversion studies, that heavier trucks do indeed divert shipments off of short line railroads and onto our highway network. Loss of shipments and revenues to these smaller rail operators could financially cripple them, and lead to a loss of rail services to areas dependent upon these lines. For these reasons, we believe that at this time neither the Panel on 21st Century Freight Transportation nor individual Members of Congress should endorse longer or heavier trucks.

America’s freight railroads and their 140,000-mile network serve nearly every industrial, wholesale, retail, and resource-based sector of our economy. In fact, our railroads carry just about everything. Railroads carry more coal than any other single commodity. Historically, coal has generated much more electricity than any other fuel source, and most coal is delivered to power plants by rail. But railroads also carry enormous amounts of corn, wheat, and soybeans; fertilizers, plastic resins, and a vast array of other chemicals; cement, sand, and crushed stone to build our highways; lumber and drywall to build our homes; animal feed, canned goods, corn syrup, frozen chickens, beer, and countless other food products; steel and other metal products; crude oil, liquefied gases, and many other petroleum products; newsprint, recycled paper and other paper products; autos and auto parts; iron ore for steelmaking; wind turbines, airplane fuselages, machinery and other industrial equipment; and much more. Rail intermodal- the transport of shipping containers and truck trailers on railroad flatcars has grown tremendously over the past 25 years. Today, just about everything you find on a retailer’s shelves may have traveled on an intermodal train. Increasing amounts of industrial goods are transported by intermodal trains as well. Given the volume of rail freight (close to two billion tons and 30 million carloads in a typical year) and the long distances that freight moves by rail (nearly 1,000 miles, on average), it’s hard to overstate freight railroads’ role in our economy. The rail share of freight ton-miles is about 40 percent, more than any other transportation mode. But freight rail’s contribution to our nation extends far beyond that:

Thanks to competitive rail rates 44 percent lower, on average, in 2012 than in 19801 and the lowest among major industrialized countries freight railroads save consumers billions of dollars every year, making U.S. goods more competitive here and abroad and improving our standard of living. Railroads are, on average, four times more fuel efficient than trucks. Because a single train can carry the freight of several hundred trucks enough to replace a 12-mile long convoy of trucks on the highways railroads cut highway gridlock and reduce the high costs of highway construction and maintenance.

Freight Rail as a Complement to Trucks

No one, and certainly not railroads, disputes that motor carriers are absolutely indispensable to our economy and quality of life, and will remain so long into the future. That said, because of the enormous cost involved in building new highways, as well as environmental and land use concerns, it is highly unlikely that sufficient highway capacity can be built to handle expected future growth in freight transportation demand. As it is, over the past 30 years, highway traffic volume growth has far eclipsed growth in highway lane-miles (see nearby chart), and there is little reason to think that will change in the years ahead. The United States has the world’s most highly developed highway network, built and maintained at enormous public cost over the years. According to data from the FHW A, in 2011 alone, states disbursed $94 billion just on capital outlays and maintenance for highways (Federal Highway Administration, Highway Statistics 2011, Table SF-2, Association of American Railroads Page 4). Adding in other expenses such as administration and planning, law enforcement, interest, and grants to local governments brings total disbursements for highways to $150 billion in 2011. Even this huge level of spending, however, is widely considered inadequate to meet present-day, much less future, needs.

Fortunately, freight rail in general, and intermodal rail specifically, represents a viable and socially beneficial complement to highway freight movement. Today, rail intermodal takes millions of trucks off our highways each year, and its potential to play a much larger role in the future is enormous,

First-Mile and Last-Mile Connections

One of the main reasons why the United States has the world’s most efficient total freight transportation system is the willingness and ability of firms associated with various modes to work together in ways that benefit their customers and the economy. Policymakers can help this process by implementing programs that improve “first mile” and “last mile” connections where freight is handed off from one mode to another for example, at ports from ships to railroads or from ships to trucks, or from railroads to trucks at intermodal terminals. These connections are highly vulnerable to disruptions, and improving them would lead to especially large increases in efficiency and fluidity and forge a stronger, more effective total transportation package. Railroads are gratified that the current administration and legislators in both parties and in both houses of Congress have shown a strong commitment to multi-modalism. That’s evidenced, for example, in the evaluation and selection process for TIGER grants. To date, several dozen projects that have received TIGER grant funding have been associated in one way or another with freight railroads, and many of those projects are aimed at improving transportation performance by more effectively integrating different transportation modes. Some intermodal connection infrastructure projects that are of national and regional significance in terms of freight movement could be too costly for a local government or state to fund. Consequently, federal funding awarded through a competitive discretionary grant process, like the TIGER program, has been an appropriate approach for these needs.

Railroads have played a key role in this globalization. We estimate, for example, that railroads account for approximately one-third of U.S. exports, and that approximately half of U.S. rail intermodal traffic consists of exports or imports. There’s no doubt that globalization will continue, and railroads are working hard to ensure that they can continue to play a crucial role. The expansion of the Panama Canal is a case in point. As you probably know, the Panama Canal currently has two lock chambers, the dimensions of which limit the size of container ships that can traverse the canal. So-called “Panamax” ships, the largest ships that can currently use the canal, can carry a maximum of around 4,500 containers. However, a larger third lock chamber is under construction with completion likely in 2015 that will allow much larger ships to pass through. These larger “post-Panamax” ships will be able to carry up to approximately 12,500 containers, or nearly three times the maximum number carried by existing ships that use the canal. The big unknown is where ships carrying cargo that are bound for, or coming from, the eastern part of the United States will go. Today, a significant portion of the cargo from Asia destined for the eastern part of the United States is offloaded at West Coast ports (such as Los Angeles, Long Beach, Seattle, Tacoma, Vancouver, or Prince Rupert in British Columbia), and then transported inland on trucks, railroads, or, in some cases, rivers. Going the other way, cargo headed to Asia from the eastern part of the United States often travels via rail or truck to West Coast ports, where it is loaded onto ships heading west. It is not uncommon for existing Panamax (or smaller) ships coming from Asia with cargo bound for the eastern United States, as well as ships with cargo from the eastern United States heading to Asia, to go through the Panama Canal on an “all water” route, rather than use the land bridge (via truck or rail) across the country described in the previous paragraph. Some observers believe that the huge capital costs of the newer vessels and other factors will cause these ships to remain primarily on routes to the West Coast. Many others, though, think that a post-Panamax ship is just as likely to find it cost effective to use the “all-water” route to or from the eastern United States. Of course, if an all-water route is to be used, the eastern ports must be able to handle the post-Panamax vessels, which is the rationale for the efforts by a number of ports on the East Coast, the Southeast, and the Gulf of Mexico to dredge deeper channels, install new cranes, and/or build new dock capacity to accommodate post-Panamax ships. Meanwhile, ports on the West Coast are pursuing many of these same kinds of improvements to better position themselves as the preferred destination for ocean carriers even after the canal expansion is complete. Frankly, I don’t know which ports will be the “winners” and which will be the “losers” of this competitive battle. I do know, though, that from the point of view of our nation’s rail industry as a whole, it doesn’t really matter. The fact is, whether the freight is coming into or leaving from Long Beach or Savannah or Miami or Houston or Seattle or Norfolk or any other major port, our nation’s freight railroads are in a good position now, and are working diligently to be in an even better position in the future, to offer the safe, efficient, cost-effective service that their customers at ports and elsewhere want and need.

In a June 4, 2012 interview, in response to a question about the Panama Canal expansion, the CEO of Norfolk Southern said, “We are preparing and planning so that if the traffic comes in from the East and needs to move inland, we’ll be there to handle it. If the traffic comes in from the West and comes to a western gateway with one of the western carriers, we’ll be ready to handle it. He was speaking on behalf of his railroad, but his statement applies equally well to the rail industry as a whole


From 2008 to 2012, Class I railroads purchased 2,669 new state-of-the-art U.S. Freight Railroad Spending

locomotives and rebuilt another 845 locomotives to improve their capabilities. Over the same time period, railroads installed nearly 77 million new crossties, installed 2.9 million tons of new rail, and placed nearly 61 million cubic yards of ballast.

If the United States is to have the socially optimal amount of rail capacity, sound public policy is needed. First, policymakers should keep the current system of balanced rail regulation in place. The global superiority of U.S. freight railroads is a direct result of a regulatory system, embodied in the Staggers Rail Act of 1980, that relies on market-based competition to establish most rail rate and service standards. The Staggers Act did not eliminate government oversight. Government regulators today still can take action, including setting maximum-allowable rail rates. However, Staggers allowed railroads to act more like other businesses in terms of deciding for themselves how to utilize their assets and price their services. This balanced regulation has allowed railroads to improve their financial performance from anemic levels prior to Staggers to higher levels today, which in turn has allowed them to plow back hundreds of billions of dollars into improving the performance of their infrastructure and equipment to the immense benefit of their customers and our nation at large. Unfortunately, some special interests are calling for a return to the days of unbalanced and unreasonable regulation that would force railroads to artificially cut their rates to below market levels to certain favored shippers. A few shippers might benefit, but at the expense of all other shippers, rail employees, and the public at large.

Trucks, airlines, and barges operate over highways, airways, and waterways that the government largely pays for.

By contrast, America’s freight railroads pay nearly all of the costs of their tracks, bridges, and tunnels themselves.

To keep their networks in top condition and to build the new capacity that America will need in the years ahead, railroads must be able to earn enough to pay for it. Artificially cutting rail earnings would severely harm railroads’ ability to do this. It would mean less new rail capacity and less reliable rail service, negatively affecting the entire U.S. logistics chain. At a time when the pressure to reduce government spending on just about everything including transportation infrastructure is enormous, it makes no sense to enact public policies that would discourage private investments in rail infrastructure that would boost our economy and enhance our competitiveness. Second, where there is voluntary agreement between public and private sector stakeholders, policymakers should encourage and facilitate public-private partnerships for freight railroad infrastructure improvement projects where the fundamental purpose of the project is to provide public benefits or meet public needs. Public-private partnerships arrangements under which private freight railroads and government entities both contribute resources to a project offer a mutually beneficial way to solve critical transportation problems. When more people and freight move by rail, the public benefits tremendously through lower shipping costs, reduced highway gridlock, enhanced mobility, lower fuel consumption, lower greenhouse gas emissions, and improved safety. Such voluntary partnerships allow governments to expand the use of rail, paying only for the public benefits of a project. Meanwhile, host freight railroads pay for the benefits they receive. It’s a win-win for all involved. Many members of this panel recently saw firsthand one of the nation’s pre-eminent railroad public-private partnerships: the Alameda Corridor. That project combined public and private financing and ultimately facilitated enormous port growth and efficient rail operations while reducing the effects of freight movements on local communities and delivering significant environmental benefits. Without a partnership, many projects that promise substantial public benefits (such as reduced highway congestion by taking trucks off highways, or increased rail capacity for use by passenger trains) in addition to private benefits (such as enabling faster freight trains) are likely to be delayed or never started at all because neither side can justify the full investment needed to complete them. The benefits from these projects therefore remain essentially trapped until cooperation makes them feasible. With public-private partnerships, the public entity devotes public dollars to a project equivalent to the public benefits that will accrue. Private railroads contribute resources commensurate with the private gains expected to accrue. As a result, the universe of projects that can be undertaken to the benefit of all parties is significantly expanded.

Rail expansion projects often face vocal opposition from members of affected local communities or even larger, more sophisticated special interest groups from around the country. In many cases, railroads face a classic “not-in-my-backyard” problem, even for projects for which the benefits to a locality or region far outweigh the drawbacks. In the face of local opposition, railroads try to work with the local community to find a mutually satisfactory arrangement, and these efforts are usually successful. When agreement is not reached, however, projects can face lawsuits, seemingly interminable delays and sharply higher costs. A number of major rail intermodal terminal projects that yield tremendous gains for the overall logistical system, for example, have been and continue to be unduly delayed. Just one of the many examples involves an intermodal terminal BNSF Railway has been trying to build for years near the ports of Long Beach and Los Angeles. This facility would eliminate millions of truck miles annually from local freeways in Southern California, while utilizing state-of-the-art environmentally friendly technology such as all-electric cranes, ultra-low emissions switching locomotives, and low-emission yard equipment. It would be one of the “greenest” such facilities in the world, but the project continues to face court actions and other protests.

Most recently, the 11th Congress rejected proposals to increase maximum allowable truck weights to 97,000 pounds. Instead, MAP-21 directed the U.S. Department of Transportation to conduct a comprehensive two-year study to examine the impacts of trucks exceeding current federal size and weight limits. We urge policymakers to defer consideration of any truck size and weight legislation until the congressionally mandated study is completed.


Freight Transportation Modes Should Pay Their Own Way

The truck size and weight issue is related to a broader point: as a general rule, the various freight transportation modes should pay their own way. The traditional connection in which users of freight infrastructure pay for that infrastructure should not be broken.

America’s freight railroads pay virtually all of the costs of their tracks, bridges, and tunnels themselves.

Trucks pay only about 80% of the cost of the damage they cause to taxpayer-funded roads and bridges, while trucks weighing 80,000 to 100,000 pounds pay for only around half of the damage they cause. This huge underpayment, which totals several billion dollars per year, means that repairing much of the highway and bridge damage caused by heavy trucks is paid for by the general public, not by the trucking companies themselves.

As the Government Accountability Office (GAO) has pointed out, the existence of underpayments “distorts the competitive environment by making it appear that heavier trucks are a less expensive shipping method than they actually are and puts other modes, such as rail and maritime, at a disadvantage.” (U.S. Government Accountability Office, “Freight Transportation: National Policy and Strategies Can Help Improve Freight Mobility,” GAO-08-287, January 2008, p. 16.)

Moreover, under current projections, revenues to the Highway Trust Fund (HTF) will continue to decline relative to projected needs. Funding shortfalls in the HTF in recent years have caused the federal government to transfer some $55 billion in general fund revenues to meet contract obligations and authorized funding levels. Absent the addition of new revenue streams, general fund transfers are expected to be required in the future as well perhaps as high as $15 billion annually. These transfers directly benefit the railroad industry’s major competitor, which is trucking. Combined with the existing huge truck underpayments noted earlier, these transfers are an enormous competitive hurdle that railroads must overcome and they artificially distort the freight transportation marketplace.

Proponents of lifting the existing freeze on truck sizes and weights sometimes claim that they support higher taxes to pay for the additional damage heavier trucks would cause. However, the additional taxes these proponents are willing to pay are vastly lower than what is needed to make up for the huge underpayments.

Train Control

The term “positive train control” (PTC) describes technologies designed to automatically stop or slow a train before certain accidents caused by human error occur. The Rail Safety Improvement Act of2008 (RSIA) requires passenger railroads and U.S. Class I freight railroads to install PTC by the end of2015 on main lines used to transport passengers or toxic inhalation materials (TIH). Specifically, PTC as mandated by Congress must be designed to prevent train-to-train collisions; derailments caused by excessive speed; unauthorized incursions by trains onto sections of track where maintenance activities are taking place; and the movement of a train through a track switch left in the wrong position. Positive train control is an unprecedented technological challenge.

A properly functioning, fully interoperable PTC system must be able to determine the precise location, direction, and speed of trains; warn train operators of potential problems; and take immediate action if the operator does not respond to the warning provided by the PTC system. For example, if a train operator fails to begin stopping a train before a stop signal or slowing down for a speed-restricted area, the PTC system would apply the brakes automatically before the train passed the stop signal or entered the speed-restricted area.

Such a system requires highly complex technologies able to analyze and incorporate the huge number of variables that affect train operations. A simple example: the length of time it takes to stop a train depends on train speed, terrain, the weight and length of the train, the number and distribution of locomotives and loaded and empty freight cars on the train, and other factors. A PTC system must be able to take all of these factors into account automatically, reliably, and accurately to safely stop the train.


Freight railroads have enlisted massive resources to meet the PTC mandate. They’ve retained more than 2,200 additional signal system personnel to implement PTC, and to date have collectively spent approximately $3 billion of their own funds on PTC development and deployment. Class 1 freight railroads expect to spend an additional $5 billion before development and installation is complete. Currently, the estimated total cost to freight railroads for PTC development and deployment is around $8 billion, with hundreds of millions of additional dollars needed each year after that to maintain the system.


Despite railroads’ best efforts, due to PTC’s complexity and the enormity of the implementation task and the fact that much of the technology PTC requires simply did not exist when the PTC mandate was passed and has been required to be developed from scratch much technological work remains to be done.

Railroads also face non-technological barriers to timely PTC implementation. For example, railroads are involved in discussions with the Federal Communications Commission regarding ways to streamline the currently unworkable process by which thousands of PTe antenna structures must obtain regulatory approval prior to installation. Unless that process changes, the timeline for ultimate deployment of PTC will be delayed significantly. Moreover, current FRA regulations pertaining to PTe implementation impose operational restrictions so severe that the fluidity of the rail network would be drastically impaired. It is important to resolve these issues, and the AAR appreciates that the FRA is considering them in a current rule making proceeding.

In addition to the challenges presented by both the FCC and FRA issues, the key unresolved question is, does the system work. Railroads need adequate time to ensure that this is the case. In that regard, the current PTC implementation deadline mandated by the RSIA should be extended by at least three years from December 31,2015, to December 31,2018. Given the unprecedented nature ofPTC and the uncertainties both known and unknown flexibility beyond December of 20 18 should also be addressed, with the authority for that flexibility residing with the Secretary of the Department of Transportation. Additionally, we believe that, in order to ensure that railroads can operate safely and efficiently with the PTC system, the imposition of PTC-related operational requirements and associated penalties should be deferred until all PTC systems are fully integrated and testing has been completed.

America today is connected by the most efficient, affordable, and environmentally responsible freight rail system in the world. Whenever Americans grow something, eat something, export something, import something, make something, turn on a light, or get dressed, it’s likely that freight railroads were involved somewhere along the line. Looking ahead, America cannot prosper in an increasingly competitive global marketplace, and freight logistics will suffer accordingly, if we do not maintain our best-in-the-world freight rail system.

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Nothing is true & everything Is possible: the surreal heart of the new Russia by Peter Pomerantsev

Peter Pomerantsev. 2014. Nothing Is True and Everything Is Possible: The Surreal Heart of the New Russia. Public Affairs.

[ OVERVIEW. This is an amazing look at what it is like in Russia these days. There are schools that teach golddiggers how to win the hearts of the new billionaires, Scientology-like religious scams, how any wealthy business owner can be sent to jail until huge bribes are paid, and much more. The most important point is about how the media is controlled by Putin for propaganda purposes in a very clever, sophisticated and surreal way. I have been amused over the years by Putin’s endless photo ops as a strong, macho, James Bond figure, but I’m less amused after reading this book. I thought our the U.S. was just as corrupt as Russia’s when you consider all the fraud in America and no executives in jail (mortgage bubble, credit card scams, etc.). But we have much further to fall and just because we haven’t reached the depths of Russia’s corruption yet, doesn’t mean it isn’t possible. In fact, this book makes a good case that this is where we are headed.  

Alice Friedemann www.energyskeptic.com ]

[Vitaly was a big time gangster, here is Pomerantsev’s account of his switch to making movies about gangsters]:

The day of his big shoot Vitaly took over a whole market. The scene had the young Vitaly and his gang being busted as they extorted money from the market traders. The traders played themselves, and cops had been hired to play cops. “Isn’t there a problem that you’re working for a gangster today?” we asked the cops. They laughed. “Who do you think we work for anyway?” (The new mayor of Vladivostok was a man nicknamed Winnie-the-Pooh, a mob boss who had previously served time for threatening to kill a businessman.) Vitaly’s set had a cast of hundreds, and it should have been chaos, but I’d never seen a film set so slickly run. His gangster crew was the production team. Who would dare to be late on set when professional killers are running the show? Vitaly was a natural. Cap pulled low, long finger tapping against his mouth, he set up every camera position unerringly. Though there was no script on paper, he never got lost, giving terse, tight instructions to all the players. “It’s just like setting up a heist,” he told me. “Everything’s got to be exact. Not like one of your little documentaries.” Every detail of the clothes, the guns, and the items the market traders were selling had been reproduced just as they were in the late 1980s.

The way Vitaly shot his films was more like a cheesy B-movie than documentary-style realism. Every shot of Vitaly was a glamorous close-up. He wiped his sweaty brow, sighed like a pantomime hero, looked intently into the distance, and escaped death to the sound of the Star Wars sound track. This was how he saw himself, his life, his crimes. All the pain and death he had caused and suffered were viewed by him through the corny music and cloud-machine smoke of a bad action movie.

There’s a little scene that gets played out on the TV channels every week. The President sits at the head of a long table. Along each side sit the governors of every region: the western, central, northeastern, and so on. The president points to each one, who tells him what’s going on in his patch. “Rogue terrorists, pensions unpaid, fuel shortages. . . . ” The governors looked petrified. The president toys with them, pure gangster like Vitaly. “Well, if you can’t sort out the mess in your backyard, we can always find a different governor. . . . ” For a long time I couldn’t remember what the scene reminded me of. Then I realized: it’s straight out of The Godfather, when Marlon Brando gathers the mafia bosses from the five boroughs. Quentin Tarantino used a similar scene when Lucy Liu meets with the heads of the Tokyo Yakuza clans in Kill Bill—it’s a mafia movie trope. And it fits the image the Kremlin has for the President: he is dressed like a mob boss (the black polo top underneath the black suit), and his sound bites come straight out of gangster flicks (“we’ll shoot the enemy while he’s on the shitter . . . ”). I can see the spin doctors’ logic: Whom do the people respect the most? Gangsters. So let’s make our leader look like a gangster; let’s make him act like Vitaly.

One of the areas TNT specializes in is satire. If the USSR drove humor underground and thus made it an enemy of the state, the new Kremlin actively encourages people to have a laugh at its expense: one TNT sketch show is about corrupt Duma deputies who are always whoring and partying while praising each other’s patriotism; another is about the only traffic cop in Russia who doesn’t take bribes—his family is starving and his wife is always nagging him to become “normal” and more corrupt. As long as no real government officials are named, then why not let the audience blow off some steam?

Russia does have elections, but the “opposition,” with its almost comical leaders, is designed and funded in such a way as to actually strengthen the Kremlin: when the beetroot-faced communists and the spitting nationalists row on TV political debating shows, the viewer is left with the feeling that, compared to this lot, the President is the only sane candidate.

Russia does have nongovernmental organizations, representing everyone from bikers to beekeepers, but they are often created by the Kremlin, which uses them to create a “civil society” that is ever loyal to it.

Although Russia does officially have a free market, with mega-corporations floating their record-breaking IPOs on the global stock exchanges, most of the owners are friends of the President. Or else they are oligarchs who officially pledge that everything that belongs to them is also the President’s when he needs it. This isn’t a country in transition but some sort of postmodern dictatorship that uses the language and institutions of democratic capitalism for authoritarian ends.

How Russian TV channels are structured

On the surface most Russian TV channels are organized like any Western TV station. Independent production companies pitch program ideas at the network in what looks like open competition. But there is a twist. Most of the production companies were either owned or part-owned by the heads of the network and senior execs. They were commissioning for themselves. But as they had a genuine interest in making good shows and gaining ratings, they would create a plethora of companies, each competing against the other and thus improving the quality of ideas. And while the channels themselves pay their taxes and are housed in new office buildings, the production companies, where the real money is made, operate in a quite different world.

Recently I had been cutting a show at one such production company, Potemkin. It was based far away from Moscow’s blue-glass-and-steel center, in a quiet road on an industrial estate. The gray warehouse building where Potemkin was based had no sign, no number on the black metal door. Behind the door was a dirty, draughty, prison-like room where I was met by a bored guard who would look at me each day as if I were a stranger encroaching on his living space. To get to the office I walked down an unlit concrete corridor and turned sharp right, up two flights of narrow stairs, at the top of which was another black, unmarked metal door.

Suddenly I was back in a Western office, with Ikea furniture and lots of twentysomethings in jeans and bright T-shirts running around with coffees, cameras, and props. It could be any television production office anywhere in the world. But going past the reception desk, the conference room, coffee bar, and casting department, you reach a closed white door. Many turn back at this point, thinking they have seen the whole office. But tap in a code and you enter a much larger set of rooms: here the producers and their assistants sit and argue; here the accountants glide around with spreadsheets and solemnity; and here are the loggers, rows of young girls staring at screens as their hyperactive fingers type out interviews and dialogue from rushes. At the end of this office is another door. Tap in another code and you enter the editing suites, little cells where directors and video editors sweat and swear at one another. And beyond that is the final, most important, and least conspicuous of all the inconspicuous doors, with a code that few people know. It leads to the office of the head of the company, Ivan, and the room where the real accounts are kept.

This whole elaborate setup is intended to foil the tax police. That’s who the guards are there to keep out, or keep out long enough for the back office to be cleared and the hidden back entrance put to good use. Whatever measures were taken, the tax police would occasionally turn up anyway, tipped off by someone. When they did we knew the drill: pick up your things and leave quietly. If anyone asks, say you’ve just come in for a meeting or casting.

The first time it happened I was convinced we were about to be handcuffed and sent down for fraud. But for my Russian colleagues the raids were a reason to celebrate: the rest of the day was invariably a holiday as Ivan haggled with the tax police to keep down the size of the payoff. “Only a dozen people work here,” he would say with a wink as they looked around at the many dozens of desks, chairs, and computers still warm from use. Then, I imagine, Ivan would bring out the fake accounts from the front office to support his case, and they would sit down to negotiate.

The officials would look at the fake books, which they knew perfectly well to be fake, and extract fines in line with legislation they knew Ivan did not need to comply with. So everything would be settled, and every role, pose, and line of dialogue would reproduce the ritual of legality. It was a ritual played out every day in every medium-sized businesses, every restaurant, modeling agency, and PR firm across the country.

I once asked Ivan whether all this was necessary. Couldn’t he just pay his taxes? He laughed. If he did that, he said, there would be no profit at all. No entrepreneurs paid their taxes in full; it wouldn’t occur to them. It wasn’t about morality; Ivan was a religious man and paid a tithe in voluntary charity. But no one thought taxes would ever be spent on schools or roads. And the tax police were much happier taking bribes. In any case, Ivan’s profits were already squeezed by the broadcasters. Around 15 percent of any budget went to the guy at the channel who commissioned the programs and part-owned the company.

Since the war in Iraq many were skeptical about the virtue of the West. And then the financial crash undermined any superiority they felt the West might have. All the words that had been used to win the Cold War—“freedom,” “democracy”—seemed to have swelled and mutated and changed their meaning, to become redundant. If during the Cold War Russia gave the West the opposition it needed to unify its various freedoms (cultural and economic and political) into one narrative, now that the opposition has disappeared, the unity of the Western story seems unwound. And in such a new world, what could be wrong with a “Russian point of view?

It took a while for those working [in Russian TV] to sense something was not quite right, that the “Russian point of view” could easily mean “the Kremlin point of view,” and that “there is no such thing as objective reporting” meant the Kremlin had complete control over the truth. Once things had settled down it turned out that only about 200 of the 2,000 or so employees were native English speakers. They were the on-screen window dressing and spell-checkers of the operation. Behind the scene the real decisions were made by a small band of Russian producers. In between the bland sports reports came the soft interviews with the President. (“Why is the opposition to you so small, Mr. President?” was one legendary question.)

During the Russian war with Georgia, Russia Today ran a banner across its screen nonstop, screaming: “Georgians commit genocide in Ossetia.” Nothing of the kind had been, or would ever be, proven. And when the President will go on to annex Crimea and launch his new war with the West, Russian TV (RT) will be in the vanguard, fabricating startling fictions about fascists taking over Ukraine. But the first-time viewer would not necessarily register these stories, for such obvious pro-Kremlin messaging is only one part of Russian Television’s output. Its popularity stems from coverage of what it calls “other,” or “unreported,” news. Julian Assange, head of WikiLeaks, had a talk show on RT. American academics who fight the American World Order, 9/11 conspiracy theorists, anti-globalists, and the European Far Right are given generous space.


The theater that evening was showing a performance of Nord Ost, a musical set in Stalin’s Russia. It was Russia’s first musical. The terrorists came onto the stage during a love aria. They fired into the air. At first many in the audience thought the terrorists were part of the play. When they realized they weren’t, there were screams and a charge for the doors. The doors were blocked off already by Black Widows with explosives wired between their bodies and the doors. The men on the stage ordered the audience back into their seats; anyone who moved would be executed. The Moscow theater siege had begun; it would last four nights.

The hostages were losing hope. The terrorists demanded the President pull all federal forces out of the North Caucasus. The Kremlin had said there was no way it would negotiate: the President’s credibility was based on quelling the rebellion in Chechnya. In the late 1990s, when he was still prime minister, he had been transformed from gray nobody to warrior by the Second Chechen War, suddenly appearing in camouflage sharing toasts with soldiers on the front. The war had been launched after a series of apartment buildings had been bombed in mainland Russia, killing 293 people in their homes. Nowhere, nowhere at all, had seemed safe.

At 5:00 a.m. on the fourth night of the siege, special forces slipped a fizzing, mystery anesthetic blended with an aerosol spray gas into the ventilation system of the theater. A gray mist rose through the auditorium. The Black Widows were knocked out instantly, slouching over and sliding onto the floor. The hostages and hostage-takers all snored. Barely a shot was fired as special forces, safe from the fumes in gas masks, entered. All the Chechens were quickly killed. The soldiers celebrated the perfect operation. The darkness around me was lit up with the spotlights of news crews reporting a miracle of military brilliance. The medics moved in to resuscitate the audience. They hadn’t been warned about the gas. There weren’t enough stretchers or medics. No one knew what the gas was, so they couldn’t give the right antidotes.

The sleeping hostages, fighting for breath, were carried out, placed face up on the steps of the theater, choking on their tongues, on their own vomit. I, and a thousand TV cameras, saw the still-sleeping hostages dragged through cold puddles to city buses standing nearby, thrown inside any which way and on top of each other. The buses pulled past me, the hostages slumped and sagging across the seats and on the wooden floor, like wasted bums on the last night bus. Some 129 hostages died: in the seats of the auditorium, on the steps of the theater, in buses. The news crews reported a self-inflicted catastrophe. The Nord Ost theater siege, this terror-reality show—in which the whole country saw its own sicknesses in close-up, broadcast on live TV; saw its smirking cops, its lost politicians desperate for guidance not knowing how to behave; saw Black Widows, somehow pitiable despite their actions, elevated to prime-time TV stars; saw victories turn to disasters within one news flash—was when television in Russia changed. No longer would there be anything uncontrolled, unvetted, un-thought-through. The conflict in the Caucasus disappeared from TV, only to be mentioned when the President announced the war there was over, that billions were being invested, that everything was just fine, that Chechnya had been rebuilt, that tourism was booming, that 98% of Chechens voted for the President in elections, and that the terrorists had been forced out to refuges in the hills and forests. When someone from the Caucasus appears on television now, it’s usually as entertainment, the butt of jokes like the Irish are for the English. But despite all the good news from the Caucasus, Black Widows still make it up to Moscow with rhythmic regularity. Over time their profile has changed: they are less likely to be the wives or daughters of those killed in the war in Chechnya.


Often you find all the styles compiled into one building. A new office center on the other side of the river from the Kremlin starts with a Roman portico, then morphs into medieval ramparts with spikes and gold-glass reflective windows, all topped with turrets and Stalin spires. The effect is at first amusing, then disturbing. It’s like talking to the victim of a multiple personality disorder: Who are you? What are you trying to say? Increasingly new skyscrapers recall the Gotham-gothic turrets of Stalin architecture. Triumph-Palace, briefly Europe’s tallest apartment building, is a copy of the Stalinist “seven sisters.” Long before the city’s political scientists started shouting that the Kremlin was building a new dictatorship, the architects were already whispering: “Look at this new architecture, it dreams of Stalin. Be warned, the evil Empire is back.” But the original Stalin skyscrapers were made of granite, with grand mosaics and Valhalla halls leading to small, ascetic apartments. The new ones try to be domineering but come across as camp; developers steal so much money during construction that even the most VIP, luxury, elite of the skyscrapers crack and sink ever so quickly. That unique Moscow mix of tackiness and menace.

It should be untouchable. But the tremors of drill and demolition ball only become more frenzied with every meter closer you get to the Kremlin. Property prices are measured by distance from Red Square: the aim is to build your office or apartment as close to the center of power as possible, the market organized by a still feudal social structure defined by needing to be within touching distance of the tsar, the general secretary of the Communist Party, the President of the Russian Federation. The country’s institutions—oil companies, banks, ministries, and courts—all want to crowd around the Kremlin like courtiers. This means the city is almost destined to destroy itself; it can’t grow outward, so every generation stomps on the heads of previous ones. Over a thousand buildings have been knocked down in the center so far this century, with hundreds of officially “protected” historic monuments lost. But the new buildings meant to replace them often stand dark and empty; property is the most effective money laundering scheme, making money for members of the Moscow government who give contracts to their own development companies, for the agents who sell the buildings to the nameless and faceless Forbeses, who need some way to stabilize their assets. A small crowd has gathered near the building site on Gnezdnikovsky. They put candles and flowers on the pavement in a little gesture of lament. These flash mobs mourning the death of old Moscow have become more frequent.

On the corner of Pakrovka three plump women who look like schoolteachers or doctors patrol an art nouveau apartment block, surrounded by their Labradors. They squint aggressively as we approach, then relax and greet Mozhayev when they see him. These little vigilante gangs have become common in Moscow, protecting not from burglars but from developers, who send arsonists to set buildings ablaze, then use the fire as an excuse to evict homeowners by claiming the houses are now fire hazards. The motivation is great: property prices rose by over 400 percent in the first decade after 2000. So these fires have become habitual in Moscow. Muscovites have taken to patrolling their own buildings at night: gangs of doctors, teachers, grannies, and housewives eyeing every passerby as if he were an arsonist. It’s pointless for them to call the police; the largest groups of developers are friends and relatives of the mayor and the government. The mayor’s wife is the biggest of the lot. The near mythical Russian middle class, suddenly finding they have no real rights at all over their property, can be thrown out and relocated like serfs under a feudal whim.

There isn’t a building that we walk past that wasn’t the scene of execution squads, betrayals, mass murders. The most gentle courtyards reveal the most awful secrets. Around the corner from Potapoffsky is an apartment block where every one of the families had someone arrested during Stalin’s terror. In the basement of what is now a brand new shopping mall was the courtroom where innocent after innocent was sentenced to labor camps, the courts working so fast they would get through two cases inside a minute. And those are just the Stalin years, not even encroaching on the dismal betrayals of later decades, listening at the door of your neighbors’ rooms to report them tuning into the BBC or Radio Free Europe. “Every new regime rebuilds the past so radically,” Mozhayev says as we move back toward Barrikadnaya. “Lenin and Trotsky ripping up the memory of the tsars, Stalin ripping up the memory of Trotsky, Khrushchev of Stalin, Brezhnev of Khrushchev; perestroika gutting the whole Communist century . . . and every time the heroes turn to villains, saviors are rewritten as devils, the names of streets are changed, faces [are] scrubbed out from photographs, encyclopedias [are] re-edited. And so every regime destroys and rebuilds the previous city.” On the corner of Barrikadnaya a little baroque house is pushed out of the way by a constructivist apartment block of the 1920s, in turn dominated by a sneering, Stalin skyscraper, itself now outflanked by the dark glinting tiles of a huge, domed new mall, resembling the tents and spears of Mongol battle camps. And all these buildings seem to push and shove each other out of the way. If areas of London or Paris are built in a similar style—searching for some sort of harmony, memory, identity—here each building looks to stamp and disdain the last, just as every regime discredited the previous.


Whenever twenty-first-century Russian culture looks for a foundation it can build itself from, healthy and happy, it finds the floor gives way and buries it in soil and blood. When the Ostankino channels launch the Russian version of the British TV show Greatest Britons, renamed Name of Russia, it’s meant to be a straightforward PR project to boost the country’s patriotism. The audiences across the nation are to vote for Russia’s greatest heroes. But as the country starts to look for its role models, its fathers, it turns out that every candidate is a tyrant: Ivan the Terrible, founder of Russia proper in the sixteenth century and the first tsar; Peter the Great; Lenin; Stalin. The country seems transfixed in adoration of abusive leaders. When the popular vote starts to come in for Name of Russia, the producers are embarrassed to find Stalin winning. They have to rig the vote so that Alexander Nevsky, a near-mythical medieval warrior knight, born, we think, in 1220, can win. He lived so long ago, when Russia was still a colony of the Mongol Empire between the thirteenth and fifteenth centuries, that he seems a neutral choice. Russia has to reach outside the history of its own state to find a father figure. But though this was never mentioned in the program, what little evidence there is of his career shows that Nevsky made his name by collecting taxes, quelling and killing other rebellious Russian princelings for his Mongol suzerain. How do you build a history based on ceaseless self-slaughter and betrayal? Do you deny it? Forget it? But then you are left orphaned. So history is rewritten to suit the present. As the President looks for a way to validate his own authoritarianism, Stalin is praised as a great leader who won the Soviet Union the war. On TV the first attempts to explore the past, the well-made dramas about Stalin’s Terror of the 1930s, are taken off screen and replaced with celebrations of World War II. (But while Stalin’s victory is celebrated publicly and loudly, invoking him also silently resurrects old fears: Stalin is back! Be very afraid!) The architecture reflects these agonies. The city writhes as twentyfirst-century Russia searches, runs away, returns, denies, and reinvents itself.

I advise him to take care on the corner where the traffic police like to change the signs from “single lane” to “no way” overnight to catch out drivers and extract their rent—the city is an obstacle course of corruption, and your options are to get angry or play up and play the game and just enjoy it.

A Muscovite measures out his life in jams, the day’s success or failure judged by how many hours you spend in traffic. They have become the city’s symbol. The only way to relieve the city would be to move financial and government centers out of the inner rings of town. But that would be out of keeping with the feudal instincts of the system. So the traffic becomes the expression of the stalemate at the center of everything: on the one hand the free market means everyone can own a car, but on the other all the cars are in jams because of the underlying social structure. The siren-wielding, black (always black), bullet-proof Mercedeses of the big, rich, and powerful are free to drive against the flow of traffic, speed through the acid sludge, driven by modern-day barons who live by different rules. The sirens are the city’s status symbol, awarded like knighthoods to the most loyal bureaucrats, businessmen, and film directors (or for a certain price).

“Don’t worry, my brother,” he tells me, “we’ll clean the streets of all the filth, all the darkies, the Muslims and their dirty money. Holy Russia will rise again.” One bumps into these types occasionally, Eurasianists, Great Russians, holy neo-imperialists, and the like, few but quietly supported by the Kremlin to have a mouthpiece through which to keep the conversation away from corruption and focused on fury at foreigners (the Kremlin isn’t keen to say these words itself).

Military Service

I pass through the station and head for the St. Petersburg train and my latest story—about mandatory military service, the great initiation into Russian manhood. Every April and October the color khaki seems to suddenly sprout on the streets as bands of young soldiers appear in the cities; skinny, in uniforms either too large or small, with pinched red noses and red ears, scowling at the gold-leaf restaurants. They hang around at the entrances of metro stations where the warm air gusts up from the underground, shiver while sucking on tepid beer on street corners of major thoroughfares. They come shuffling upstairs and knocking on apartment doors and stalk through parks. It’s the time of year of Russia’s great annual hide and seek; the soldiers have been given orders to catch young men dodging the draft and force them to join the army.

Military service might be mandatory for healthy males between 18 and 27, but anyone who can avoids it. The most common way out is a medical certificate. Some play mad, spending a month at a psychiatric clinic. Their mothers will bring them in: “My son is psychologically disturbed,” they will say. “He has been threatening me with violence, he wakes up crying.” The doctors of course know they are pretending, and the bribe to stay a month in a loony bin will set you back thousands of dollars. You will never be forced to join up again—the mad are not trusted with guns—but you will also have a certificate of mental illness hanging over you for the rest of your career.

Other medical solutions are more short term: a week in the hospital with a supposedly injured hand or back. This will have to be repeated every year, and annually the hospitals fill up with pimply youths simulating illness. But the medical route takes months of preparation: finding the right doctor, the right ailment—because the ailments that can get you off change all the time. You turn up at the military center with the little stamped registration card that your mother has spent months organizing and saving for, then find that this year flat feet or shortsightedness are no longer a legal excuse.

If you’re at a university you avoid military service (or rather you fulfill it with tame drills at the faculty) until you graduate. There is no greater stimulus for seeking a higher education, and Russian males take on endless master’s degree programs until their late twenties. And if you’re not good enough to make it into college? Then you must bribe your way into an institution; there are dozens of new universities that have opened in part to service the need to avoid the draft. And the possibility of the draft makes dropping out of college much more dangerous—the army will snap you up straightaway. When the bad marks come in, mothers start to fret and scream at their sons to work harder. And when they can see the boys might fail, it’s time to pay another bribe, to make sure they pass the year. But there are a certain number of pupils the teacher has to fail to keep up appearances, and the fretting mothers start to put out feelers for the most desperate and most expensive remedy: the bribe to the military command. The mothers come to the generals, beat and weep on the doors of the commanders, cry about their sons’ freedoms (money by itself is not always enough; you have to earn the emotional right to pay the bribe).

But all these options are only available for those with money and connections. For the others, for the poorer ones, it’s hide and seek time. The soldiers will grab anyone who looks the right age and demand his documents and letters of exemption, and if he doesn’t have them march him off to the local recruitment center. So the young spend their time avoiding underground stops or hiding behind columns and darting past when they see the soldiers are flirting with girls or scrounging cigarettes off passersby. You see teens sprinting through the long, dark marble corridors of the subway as cops give chase.

When soldiers come by apartments, potential conscripts pretend they are not there, barricading themselves in, holding their breath until the soldiers go away. The soldiers eventually get tired and leave, but from now on every time you have your documents checked by police you will be trembling that they might ring through and see whether you dodged the draft. And every time you go into the subway, every time you cross a main road, every time you meet friends near a cinema, any time you leave your little yard, life becomes full of trepidation. And you will live semi-illegally until you are 27, unable to register for an official passport and thus unable to travel outside of the country. This is the genius of the system: even if you manage to avoid the draft, you, your mother, and your family become part of the network of bribes and fears and simulations; you learn to become an actor playing out his different roles in his relationship with the state, knowing already that the state is the great colonizer you fear and want to avoid or cheat or buy off.

Those too poor, too lazy, or too unlucky to avoid the draft—or those for whom the army seems a better option than anything they have—are rounded up, stripped, shaved, and packed off to bases all across the country.

Where he will be sent depends on the bribe a soldier pays. Some will go to Chechnya, to Ossetia, to the death zones everyone dreads. But if you pay in time, you’ll avoid those. What no one will be safe from is hazing, known in Russia as the “law of the grandfather”: dozens of conscripts are killed every year, hundreds commit suicide, and thousands are abused. Those are just the official statistics.

This is why every mother wants to keep her son away from the army. New conscripts are known as “spirits.” And as the tarpaulin-covered trucks pass through the gates of the army bases, the conscripts will hear the shouts of the older officers waiting for them: “Hang yourselves, spirits, hang yourselves!” they call. And the great breaking-in begins. The Committee of Soldiers’ Mothers, an NGO run by the mothers of conscripts past and present, is the refuge “spirits” flee to when they run away from camp.

In the office of the Soldiers’ Mothers the walls are lined with photographs of dead soldiers. I’ve come to interview four 18-year-olds who have recently fled from a nearby base called Kamenka. They are desperate to prove they didn’t just run away because of common hazing, that they’re loyal, tough. They seem embarrassed by having to take shelter with fifty-year-old women.

“You get beaten up, that’s fine. I pissed blood but that didn’t scare me,” says one, the skinniest. “Stools broken over your head. It’s good for you,” echoes another. “They put a gas mask over your face, then force you to smoke cigarettes while you do push-ups. If you get through that you’re a real man.” “I’m not red, . . . ” they all repeat.

“You need discipline. But what happens at Kamenka has nothing to do with discipline.” “The ‘grandfathers’ beat you to extort money, not because they want to make a soldier out of you.” The conscripts spend most of their time repairing and repainting military vehicles, which are then sold on the sly by Kamenka’s command. The “spirits” are essentially used as free labor.

The boys had run away after a night of nonstop beatings. The “grandfathers” had been drinking all day, and then at night they began to whack the boys with truncheons. The commanding officer came by but did nothing; commanding officers need the help of the “grandfathers” in their larger corruption schemes and let them have their fun. They go to great lengths to cover up for the “grandfathers.

“In one week, the Soldiers’ Mothers told me, five “spirits” at Kamenka had their spleens beaten to a pulp. The commanders couldn’t take the “spirits” to a normal hospital; too many questions would be asked. So they had to take them privately, paying 40,000 rubles (over $1,000) for each operation. At 6:00 a.m. the “grandfathers” told the “spirits” they needed to each bring 2,000 rubles ($50) by lunchtime or they would kill them. One of the conscripts, Volodya, had decided to make a run for it. He slipped through the fence and made it to the road. His father had picked him up and brought him here.


Another director is shooting a film about a man in Ekaterinburg who was beaten nearly to death by traffic cops when he refused to pay a bribe; now he exacts his vengeance by catching traffic cops giving bribes on video and posting them online.

The victims I meet never talk of human rights or democracy; the Kremlin has long learned to use this language and has eaten up all the space within which any opposition could articulate itself. The rage is more inchoate: hatred of cops, the army. Or blame it all on foreigners.

Some teens, the anarchists and artists, have started to gather and protest, rushing out of the metro and cutting off the roads and the main squares. They call their gatherings “Monstrations” and carry absurdist banners: “The sun is your enemy.” “We will make English Japanese.” “Eifiyatoloknu for president.” The only response to the absurdity of the Kremlin is to be absurd back. An art group called Vojna (“War”) are the great tricksters of the Monstration movement: running through the streets and kissing policewomen; setting cockroaches loose in a courtroom; projecting a skull and crossbones onto the parliament building.


Just as I feel I’m on a roll, my little corridor is cut off. “We’re sorry, Peter,” my producers tell me at TNT, “we’ve been told to stop making . . . ‘social’ films. You understand. . . . ” They look a little uncomfortable when they say this. I’m uncomfortable for their discomfort, and I find myself nodding. Of course I understand. I have learned to pick things up on the edge of a hint. I don’t ask “why.” I don’t argue that ratings should be our priority. There are unspoken walls. The Kremlin wave of cleaning things up has finished. The 2008 financial crisis in the West has lowered the oil price, and there’s less money for the Kremlin to indulge in toying with reforms. We need calm now. The economy is curdling.

As I am coming out of TNT toward evening, the neon lamps on the sushi bars are already lighting up dark mountains of dirty acid sludge: the chemicals the city puts in grit burn the paws of stray dogs. You can hear them whimper as they huddle by the warm pipes along the buildings. Two pork-faced cops, whom Muscovites have taken to calling “werewolves in uniform,” patrol the corner. I try not to gawk and walk past in the Moscow style, face down and furious. The main thing is not to catch their eye—one of my many registrations has expired. But they can still smell the fear on me—belching out the phrase that is their mark of power: “Documents: Now!” I know the script. They shepherd me toward the darkness of a courtyard. Then comes the ultimate Moscow transaction, the slipping of the bribe, a 500-ruble note already placed that morning among the pages of my passport (the rate has been going up as the economy worsens). But never offer money directly. Paying bribes requires a degree of delicacy. Russians have more words for “bribe” than Eskimos do for “snow.


Grigory began by making his own computers. They sold well. Soon he had a team of other students working with him. Got involved with banking. Then came the new world of threats, bodyguards. At the parties, people would whisper he was lucky to have made it through alive. “The worst is when people owe you money,” Grigory told me once as we drove through the woods outside of Moscow in a new, silver, sports car. “As long as you owe them, they’ll never kill you. But if they owe you they’d rather kill than pay. I dream of being able to go outside without bodyguards. A normal life.


The Rose of the World wasn’t the first sect I had encountered in Russia. As the Soviet Union had sunk, so sects had bubbled to the surface. Indeed, it was the Kremlin that had given them an impetus, via the power of Ostankino. In 1989 a new show appeared on Soviet TV. Instead of the usual ballet and costume dramas, the audience suddenly saw a close-up of a man with 1970s porn star looks, black hair, and even blacker eyes. He had a very deep voice. Slowly and steadily and repeatedly he instructed the viewer to breathe deeply, relax, breathe deeply. “Close your eyes. You can cure cancer or alcoholism or any ailment with the power of thought,” he said. This was Anatoly Kashpirovsky. He was a professional hypnotherapist who had prepared Soviet weight-lifting teams for the Olympics. He had been brought to late Soviet TV to help keep the country calm and pacified. To keep people watching TV while everything went to shit.

His most famous lecture involved asking the audience at home to put a glass of water in front of their TV sets. Millions did. At the end of the program Kashpirovsky told the audience the water was “charged with healing energy” from his through-the-screen influence. Millions fell for this. But Kashpirovsky was only the beginning.

There was Grabovoy, who had a show on television and claimed he could raise the victims of Chechen terror attacks from the dead; there was Bronnikov, who claimed he had found a way of making the blind see with an inner vision. The sect the TNT personnel were referring to when they mentioned “communes in Siberia” was that of Vissarion, a former postal worker from Krasnodar who became convinced he was the returned Christ. In the 1990s he had founded a colony in the mountains near the border with Mongolia: “The Abode of Dawn City.” It’s still there.

Posted in Corruption, Financial, Russia | 2 Comments

How logistics facilitate an efficient freight transportation system 2013. U.S. House

[ It is alarming that at a time we are about to rollercoaster down the other side of Hubbert’s peak, continued growth is expected. Chairman Duncan states: “With our Nation’s population expected to exceed 400 million by 2050, freight volume is expected to grow by 60% in the next three decades”. I have yet to see one government or corporate document that doesn’t assume endless growth like this, and fret over the thousands of (lane) miles of new roads, bridges, and so on required. Although this hearing talks about efficiency — which does save energy– there is no discussion of funding and encouraging the transportation modes that save the most energy: ships and rail, and how to diminish the most wasteful: airplanes and trucks.  I’m interested in Congressional Hearings to see what our government is doing about the most pressing problems we face. First and foremost, civilization depends on heavy-duty freight transportation that depends on diesel fuel. Everything else is secondary to that, since the electric grid, buildings, and other objects need their components delivered.

Also below are two other hearings:

  1. House 113-32. July 26, 2013. How freight transportation challenges in urban areas impact the nation. House of Representatives. 68 pages.
  2. House 113-21. May 30, 2013. How Southern California freight transportation challenges impact the nation. U.S. House of Representatives. 106 pages.

Alice Friedemann www.energyskeptic.com ]

House 113-27. June 26, 2013 How logistics facilitate an efficient freight transportation system. House of Representatives. 84 pages

Today’s hearing examines the relation between logistics and a productive, efficient, and safe freight system. The movement of goods across the country may not always grab headlines, but the efficiency of freight transportation has a major impact upon the lives of every American on a daily basis. From the clothes we wear to the cars we drive to the food we eat, the freight transportation system impacts all aspects of our everyday lives. The logistics industry is valuable to the Nation’s freight system because logistics improve the efficiency of the supply chain. The logistics industry adds value to the supply chain by improving the planning, implementation, and control of the flow of goods from point of origin to point of consumption.

The U.S. freight system moves nearly $19 trillion worth of goods each year. These products frequently move back and forth between ocean vessels, highways, railroads, air carriers, inland waterways, ports, pipelines, warehouses, and distribution centers.

The logistics industry adds value to the supply chain by improving planning, implementation, and control of the flow of goods from origin to destination. Every Fortune 100 and 80% of the Fortune 500 companies employ at least one freight forwarder, also known as third-party logistics (3PL) provider to improve their operations. In 2011, domestic spending in the logistics and transportation industry was nearly $1.3 trillion, about 8.5% of the Nations GDP.


Some statistics: UPS has 100,000commercial vehicles and 560 aircraft delivering 16.3 million packages a day to 8.8 million customers in 220 countries.

A typical package flow (this one takes 4 days)

  • Get the package from its origin and drive it to the nearest local pickup facility, Bay Center near Los Angles
  • Scan, sort, and load onto a trailer with other packages bound for the nearest UPS HUB, Olympic in downtown Los Angeles
  • Add on another trailer (double-trailer configuration) and drive to the Chicago area consolidation HUB (CACH)
  • Unload and sort packages, put this one in a rail trailer to a nearby rail yard in Chicago
  • Load the trailer onto a railcar for its journey to Little Ferry, New Jersey
  • Transfer trailer from the train to a truck chassis and drive to Island City HUB in Queens, NY
  • Sort and truck to destination facility in Brooklyn on Foster Ave
  • Put the parcel in a brown package delivery truck and deliver to recipient in Brooklyn
  • The manufacturer in Brooklyn assembles his product with the part and calls UPS to deliver it to a customer in Cologne, Germany via Next Day Air Express
  • UPS would truck the package from New York to the Philadelphia Airport for its airplane ride to Cologne Germany
  • And then several more processing steps in Germany before the customer receives the package

Over the decades, America’s transportation infrastructure has been built in silos. Highways connected to highways. Railroads connected with railroads. Congress has tried to link them together, but it is still a patchwork. And America needs a freight system that is built like a network.

For highways, the simplest improvement is increasing the length but not the weight of each trailer from 28.5 feet to 33 feet in twin trailer configurations. This would allow freight to move more efficiently, reduce the number of trucks on the road, and would provide environmental benefits without compromising highway safety. Because we are not increasing the weight limit, there is no risk of further damage to highways and bridges.

Tracy Rossers, senior vice president of transportation for Wal-Mart Stores, Inc.

Walmart opened its first distribution center in 1970, using a system designed to quickly and efficiently replenish our shelves. Walmart logistics employs 77,000 associates at 150 distribution centers and 87 transportation offices. We run 6,200 trucks, 55,000 trailers, and we have 7,500 drivers in our private fleet operations.

Our fleet drivers log approximately 700 million miles per year, with the average truck driver logging more than 100,000 miles a year. [ 700,000,000 / 6.5 miles per gallon = 107,700,000 gallons of diesel]

Our distribution center network typically serves from 90 to 100 distribution centers and caters to the needs of specific stores within a 200-mile radius of those distribution centers. They move hundreds of thousands of cases each day, and our import facilities provide efficient methods of handling international merchandise.

Walmart also has nine disaster distribution centers strategically located across the country stocked with relief supplies.

We have set sustainability goals that include doubling our fleet efficiency by 2015 with solutions like cross-dock consolidations networks, lean routing, reduction of empty miles, and optimizing how merchandise gets loaded in our trailers. In 2012, we delivered 297 million more cases, driving 11 million fewer miles than in 2011. We continue to work with the trucking industry on a variety of innovative technologies, including hybrid and other advanced power trains, alternative fuels, aerodynamics, and advanced tire technologies.

With over 4,000 stores in the U.S. and locations in every State, Walmart is a user of all modes of transportation, from our ports to our rail networks to our highway infrastructure.

We have used technology with loading techniques in managing our loading techniques to get more cases per trailer. For us, one additional case per trailer can save us and our network about $680,000 over the course of a year just getting that one extra case per trailer.

Edward R. Hamberger, president and CEO of the Association of American Railroads

We have been reinvesting more private capital than ever before, $25 billion this year alone, 40 cents of every revenue dollar back into the infrastructure, and $500 billion in the last 30 years.

We recommend the following:

  • Continue to focus programs to improve the first mile and last mile connections where freight is handed off from one mode to another, from truck to rail or rail to truck, at intermodal terminals. Improving these connections will lead to large increases in efficiency and fluidity throughout the network.
  • Encourage more voluntary—and I emphasize voluntary—public-private partnerships for freight rail infrastructure improvement projects.
  • Defer consideration of any truck size and weight legislation until the congressionally mandated study from MAP–21 is completed next year [my comment: because longer and heavier trucks would shift cargo from rail to trucks, and rail is 4 times more energy efficient than trucks are].
  • Ensure that various freight modes pay their own way. That is to say, the ‘‘user pay’’ concept has worked very well for developing and growing the infrastructure in the country. We believe that the ‘‘user pay’’ concept should continue into the future. [my comment: This is because trucks only pay 80% of the damage they do to roads and bridges with the rest picked up by citizens, while rail has to pay 100% of their maintenance and operations]

Mr. Scott Satterlee of C.H. Robinson, on behalf of the Transportation Intermediaries Association

C.H. Robinson facilitates the movement of over 11.5 million shipments a year and relies on all the Nation’s freight capacity to manage our customer shipments on a daily basis. We do not own equipment with wheels. So we are mode-neutral when moving shipments. We monitor and qualify over 45,000 U.S.-based motor carriers for proper authority, valid insurance, and other data points. 82% of the carriers operate three or fewer trucks, and 98% of the carriers operate 25 or fewer trucks. Many of these companies do not have their own dedicated sales force, so companies like C.H. Robinson enhance their sales capabilities. We also have access to all Class I railroads for intermodal freight. We operate a series of gateways and consolidation centers for air freight and ocean freight and perform customs clearances as a licensed customs broker. Some shippers only use our services a handful of times when they need assistance finding a truck while other customers have fully integrated our services and even our people into their transportation departments.

In theory, transportation should be pretty simple. If you have a load you need transported, you locate a truck, you assign the truck, and wait for the freight to deliver. Unfortunately, many variables make the matching of a load with an available truck much more complex than that. For example, weather and traffic delays, equipment failures, changing regulation, lane capacity imbalances, business seasonality, and economic conditions all add tremendous complexity to the system. In addition, systematic problems, such as short lead times and heavy reliance on expedited services, excessive loading and unloading time, poor visibility to inbound or outbound freight, and securing surge capacity during busy seasons combine to add inefficiency to the country’s transportation system.

Property freight brokers and 3PLs like C.H. Robinson mitigate these factors that contribute to inefficiency by matching the right load to the right piece of equipment at the right time.

We encourage our transportation system to have built-in modal flexibility. An example of modal flexibility would be an increase in rail ramps across the Nation or a viable shortsea shipping program. Also, make sure trucking remains a great opportunity for the small- and medium-sized entrepreneurs. They provide the flexibility and service to keep our entire transportation system in equilibrium. Barriers for small carriers include California’s environmental regulations, which are significantly different from the rest of the country.

Industry needs help in addressing the growing rise of sophisticated cargo theft. Regional cargo theft task forces are under increasing budgetary pressures from law enforcement agencies but provide industry and consumers valuable deterrent to a costly problem. We would also like it if consistency was ensured between food safety regulations and cargo claims regulations. It is now common for a shipper to request the destruction of hundreds of boxes of food without clearly establishing proof of actual damage. 3PLs are often caught in the middle of a tension between freight cargo claims responsibility and food safety fears.

Mr. Mark DeFabis, president and CEO of Integrated Distribution Services

I represent members of the International Warehouse Logistics Association. The IWLA is the only trade association for warehouse-based third-party logistics providers. These are companies like mine that offer warehouse-based supply chain management services to other businesses across North America. Independent warehouses are a vital part of the economy. We best serve our customers by identifying efficiencies that allow goods and materials to move with more velocity from creation to the end consumer while navigating the legislative and regulatory waters that affect goods movement. We do all of this while constantly looking for ways to achieve efficiencies within the overall supply chain. And our success is evidenced by the fact that logistics costs as a percentage of GDP have fallen almost in half from 16.2% of GDP in 1981 to 8.5% in 2012.

Our unique position in the supply chain allows us to understand just how goods move across the country and exactly where the system needs to focus to ensure smooth commerce in the future. Today’s commercial freight is multimodal. And the warehouse-based 3PL is the point at which modal interchange happens. This is one reason IWLA members’ facilities are located near every major airport, seaport, harbor, railyard, interstate interchange, and why adequate access to these locations is imperative.

Velocity and security and accuracy within the supply chain are mission critical outputs. This is the reason that warehouse-based 3PLs provide a growing number of value-added services. These warehouses, once only big boxes where goods were stored, now may label, package, sort, blend, test, and save customers on transportation costs to speed the process. These same warehouses may also support made-to-order operations and handle returns processing and refurbishing of returns.

Warehouse-based 3PLs also play a key role in another growing segment of the economy, Internet commerce. This increasing amount of e-commerce sales means more shipments are being delivered directly to the consumer. This fact demonstrates that commercial freight does not just move on interstate highways but extends all the way to the residential doorstep.

Members of the International Warehouse Logistics Association ask the committee to consider the following:

  • Develop new approaches to infrastructure financing for all commercial transit modes. These can come via traditional revenue sources and through new sources, such as user fees, mileage-based taxes, and greater use of private investment.
  • Implement policies to ensure that revenue designated for commercial freight projects cannot be diverted in the same way that Highway Trust Funds are today.
  • Guarantee that fees that are collected on imports at the ports through the U.S. Harbor Maintenance Trust Fund are used for their intended purpose, dredging and maintaining the Nation’s ports and waterways. Also, with expansion of the Panama Canal, many ports will need dredging to accommodate the larger ships transferring through the canal.

As e-commerce grows, there are a number of services offered by UPS, FedEx, and the U.S. Postal Service for last-mile delivery for some of the lighter weight packages, all the way to residential doorsteps, and we need to figure out ways to do that more efficiently now that freight isn’t just on the highways

Mr. DUNCAN. Let me ask you something else I am a little curious about. I think about a year after 9/11, the FedEx people told me that they had spent about $200 million on security measures that they wouldn’t have spent otherwise, and it just really boggles my mind how much we have spent on the Federal level, the State level, all the local governments, and then all that the private companies have spent on security, and now we have this huge industry related to security. Is that spending, has it leveled off? I guess what I am thinking about, is a few months after 9/11, the Wall Street Journal had an editorial, and they said they noticed that all the departments and agencies were sending up requests for additional money for security and they said, from now on, a wise legislative policy would be that anytime the word ‘‘security’’ was mentioned, a wise legislative policy would be to give it twice the weight and four times the scrutiny, yet we are not doing that. The Congress votes for anything that has the word ‘‘security’’ attached to it. Then I go to these ports and I go to all these places and I see all the trucks have to stop and go through the machines and all that kind of stuff, and it just seems to me we have gone ridiculously overboard on all that stuff. But are your companies, or your association, what do you say?

Mr. ABNEY. Yes, I could answer for UPS, and the answer is that it continues to grow, and I wouldn’t tie it to just 9/11. I would tie it to all the terrorism activity that has happened throughout, and one of the areas that we are really working on and working with the Federal Government on is to take a risk-based approach. So while we deliver almost 16.5 million packages a day, most of those packages, we would have no reason to suspect. So with the technology that we have that can put various parameters in and tying it into the Federal Government system, we can zero in on those areas that are—have the most risk of security, and that would be a better use of the dollars and it would allow you to target versus this shotgun approach.

Ms. HAHN. Should we look at doing something really bold like really start to talk about opening our ports for off-peak cargo movement? I know in 2002, when I traveled to Hong Kong and Singapore and saw those ports operating 24 hours a day 7 days a week, I came back to Los Angeles and spearheaded what has been sort of an incremental program. It’s called PierPASS and it has been pretty successful in moving cargo off peak. It is now 4 nights a week, and you know, maybe 1 day on the weekend, maybe not. Wondering how that would impact logistics for all of you if you weren’t always trying to meet gates that were only open certain hours, and is that something we should look at as a policy for all of our ports in the country? I would like to hear your responses on that.

Mr. ROSSER. Our customers shop our stores 24 hours a day. And what we try to do in every decision we make is we start with what does the customer want, what do they expect, and then we work to solve their need. And as a consequence of our customers wanting to shop 24 hours a day, most of our stores are open 24 hours a day. And our distribution centers operate 24 hours a day and our trucks are running 24 hours a day, trains are running 24 hours a day, …[the upshot of his rambling testimony is that of course it would be a good thing to have the port open 24 x 7]

Mr. DUNCAN. Are there places, the Panama Canal or other places in the country where we really need to expand the rail capacity or the lines coming in, anything like that? Are there any particular places where you see that we may have a problem in the years ahead?

Mr. HAMBERGER. Freight railroads fully maintain and develop their transportation infrastructure. As a result, the freight rail industry is among the most capital intensive of any of America’s industries, annually reinvesting about 17 percent of its revenue back into capital investments in the rail network. A significant percentage of these expenditures is used to expand capacity to handle more rail volume more expeditiously. Investments considered each year by the individual freight railroads include:

  • adding new track to existing right-of-way, such as a second main line
  • adding or extending new sidings on existing right-of-way
  • constructing new intermodal or transload facilities
  • new, technology-based expansion, such as signaling dark territory
  • new locomotives that increase the horsepower capacity of a railroad’s fleet

Railroads evaluate a wide variety of factors in making these investment decisions—including present and future traffic demands (as determined by railroads working closely with their customers at ports and elsewhere) and the expected return on their private invested capital. Our Nation’s freight railroads are in a good position now, and are working diligently to be in an even better position in the future, to offer the safe, efficient, cost-effective service that their customers need no matter where those customers are, no matter what the freight is, and no matter where the freight is going. America’s freight railroads have reinvested $525 billion (including maintenance expenditures) since 1980—including $25.5 billion in 2012—to create a freight rail network that is second to none in the world. If there is any area where railroads could use assistance in developing the infrastructure necessary to support the Nation’s growth, it would be in having the ability to have an expedited environmental permitting process particularly as we need to add intermodal and other terminal capacity.


House 113-32. July 26, 2013. How freight transportation challenges in urban areas impact the nation. House of Representatives. 68 pages

The purpose of the panel is to provide recommendations to the committee on ways to modernize the freight network and make the United States competitive in the 21st century.

House Rep JERROLD NADLER, NEW YORK. New York is unique in certain respects. New York and New Jersey never built a rail freight connection across the Hudson River, cutting off all of the population centers on the east side from the mainland rail transportation network. As a result, New York City, Long Island, Westchester, and southern Connecticut are completely dependent on trucks.

There is an often-cited statistic that about 43% of intercity freight moves by rail in the United States. In our region, east of the Hudson, that figure is less than 1%. That means about 99% of all goods coming into the city come by truck, almost all of that across the George Washington Bridge.

There is a small percentage of rail that travels by barge where we literally float the railcars across the harbor between New Jersey and Brooklyn. The rail barges provide a valuable service, but they really represent the latest and pinnacle of 19th-century technology. The barges are subject to the tides and the weather and are generally insufficient for moving large quantities of freight by rail.

Our region’s complete dependence on trucks exacerbates all of the normal urban challenges New York City faces such as pollution, a disproportionate impact on low-income and minority communities, and a loss or degradation of underutilized rail transportation assets. But it also creates adverse impacts for the rest of the country. This bottleneck between northern New Jersey and New York causes congestion all along the I–95 corridor. It increases the cost of doing business throughout the global supply chain, and it places an artificial lid on economic growth in one of the largest economic centers and consumer regions in the country.

The Port Authority, along with FHWA, is currently completing the environmental impact statement for the Cross-Harbor Freight Movement Project, which is looking at a number of alternatives for improving goods movement across New York Harbor. It is no secret that I believe the evidence will show that the preferred alternative will be to finally build a rail freight tunnel connecting Greenville Yard, New Jersey, which we visited this morning, to the Bay Ridge line in Brooklyn, a portal which we also visited this morning. The Port Authority was created in 1921 specifically for this purpose, so I look forward to Mr. Foye’s update on this centuries-old project. We are about 100 years behind schedule,

Perhaps the several hundred billion dollar question, is how do we pay for necessary freight improvements? While there are willing private partners, it will not be nearly enough to meet the immense needs all around the country. State and local governments cannot shoulder the burden alone, nor should they, when interstate commerce is inherently a Federal responsibility. We will have to commit Federal funding, or else we will continue to have plans and projects remain on the shelf while our economy sputters.


The Port Authority operates the Nation’s busiest metropolitan airport system. Last year, that system handled 109 million passengers, with 1.3 million tons of international air cargo, and 750,000 tons of domestic air freight. We are the largest maritime port on the east coast, handling over 5 million containers, which is more than a 60% share of the North Atlantic market. Our six international bridges and tunnels handled 14.8 million truck crossings last year, and nearly half of them used the George Washington Bridge, a critical link on the I–95 corridor.

Our port assets and associated freight rail movements are critical to the health of our region and the Nation. Freight passing through our port can reach 20% of the U.S. population or more than 62 million people in fewer than 8 hours, and more than 30%, or over 94 million people, in less than 48 hours.

All of our facilities play a distinct role in the delivery of goods within the region and beyond. For example, the Red Hook container terminal in Brooklyn, in Congressman Nadler’s district, is the only international maritime terminal with a direct land connection to Long Island and is uniquely positioned to receive and distribute international cargo to the approximately 11 million residents east of the Hudson River. We work every day to meet the needs of the Nation’s largest consumer market. Any slowdown of operations can result in an economic blow not just to the regional economy but that of the Nation. Studies indicate that a closure of our ports for only a day would cost the Nation $1 billion a day.

Over the last 10 years alone, the Port Authority and our private-sector partners have invested approximately $2.6 billion to promote efficient movement of freight. Over the last decade, we have also provided more than $688 million in local matching funds for the harbor deepening project which will deepen the main harbor channel to 50 feet to improve navigational safety and pave the way for larger cargo vessels. Earlier this year, we broke ground on a $1.3 billion project to raise the roadway of the Bayonne Bridge in Congressman Sires’ district to increase the navigational clearance above the main harbor channel to 215 feet to accommodate the new generation of larger and cleaner cargo vessels. We have committed $600 million to the development of our ExpressRail intermodal network at our port terminals to support expanded on-dock service by long-haul railroad serving inland markets. ExpressRail reaches up to 90 million customers within 24 hours in markets throughout the Midwest and eastern Canada. Through this service, it takes only 10 days to move cargo from Hamburg, Germany, to Chicago by vessel and rail combined.

Today we have the capacity to handle more than 1 million containers at our on-dock rail facilities, and by the end of the decade we will have increased our capacity to 1.5 million containers.

We are modernizing float bridges and barges that will speed the service, as well as providing new low-emission locomotives for use in both States. But we were interrupted by damage from Super Storm Sandy this last October. This operation continues to grow. Sixteen-hundred rail cars were carried in the first half of this year alone, equivalent to removing more than 6,500 trucks from the area’s roads. This represents the volume equal to all of last year.

In the coming months, the Port Authority will approve a 10-year capital program that will invest billions of dollars in our freight infrastructure. In addition to the capital investment we are undertaking to improve the efficient movement of freight, we are implementing measures to ensure that our investments benefit truckers who use Staten Island crossings to access the Howland Hook facility, thereby improving the movement of freight at this facility. The Port Authority will also invest in an expansion of ExpressRail in Staten Island to enhance that facility’s competitiveness. Since 2000, we have made $375 million in Howland Hook alone.

Mr. COYLE, VP of Environmental & Sustainable Operations, Evans Delivery Company, Inc.

Evans Delivery Company is a national provider of trucking and transportation services, handling or transporting about 500,000 containers, intermodal containers per year. The New York and New Jersey metropolitan area presents some unique challenges for both motor carriers and shippers. The New York-New Jersey metropolitan area has some of the worst traffic congestion in the Nation. Congestion in the region increases freight transportation costs by $2.5 billion and slows the movement and delivery of nearly half-a-trillion dollars’ worth of goods.

William G.M. Goetz, resident vice president for this area with CSX Transportation.

CSX is a common carrier freight railroad providing surface transportation solutions for our customers. Our 21,000-mile rail network is the largest in the eastern United States.

You have heard from other cities about freight rail’s ability to shoulder more of the burden that would otherwise be on the Nation’s interstates. You may have seen or heard that one train can carry as many as 280 trucks, while a railroad can carry 1 ton of freight nearly 450 miles on a single gallon of fuel.

As environmental considerations eliminate older methods of waste disposal in this area, such as dumping waste in the ocean or into one big hole on Staten Island, waste found itself in trucks using those limited crossings I just spoke of. Frankly, some of it still does, but much less so in recent years. Today, all of the waste collected by New York City sanitation on Staten Island is loaded into containers that leave the region by train rather than by truck. And rather than consume highway capacity on the heavily used Goethals Bridge, Staten Island’s waste leaves the island on a train using an adjacent railroad bridge that had been unused for many years. Similar solutions are serving the Bronx and portions of Brooklyn.

Today, vessels calling at New York-New Jersey marine terminals discharge cargo for numerous destinations in North America that are loaded on rail cars within the marine terminal complex and leave the port on a train. They never see a New Jersey public roadway.

Using freight rail as a transportation solution has another benefit that was tested in 2011 and again in 2012, resiliency. In the aftermath of Hurricane Sandy, containers destined for the New York-New Jersey Seaport were diverted to other ports and promptly became stranded in those ports, with over 7,000 containers in Virginia and smaller numbers in Baltimore and Philadelphia. Moving them back here became a monumental challenge. Evacuation using special CSX trains brought thousands of containers back into this market for distribution here.

House 113-21. May 30, 2013. How Southern California freight transportation challenges impact the nation. U.S. House of Representatives. 106 pages.

The freight system in this region is truly multimodal, incorporating marine ports, border crossings, interstate highways, multiple Class I railroads, numerous State highway routes, air cargo facilities, intermodal facilities, and distribution and warehouse clusters. More than 43% of the Nation’s containerized imports enter the country through southern California and go all over the place. We heard yesterday that coming into the Ports of Long Beach and Los Angeles, that 75% of those goods go out to all across the Nation. They make their way to every State, every congressional district, supporting billions of dollars of local economic activity, and millions of jobs. The southern California freight (1) network tangibly impacts the lives of customers all across this Nation.

Replacing the Gerald Desmond Bridge, which we are told carries 15% of all the freight in the country, with its crumbling concrete and low clearances, with a $1 billion new span is clearly important to the Port of Long Beach in southern California, but it is also critically important to goods movement in the entire country.

Making the highway rail grade crossing investments of the Alameda Corridor-East project is important to the San Gabriel Valley, but without this investment traffic delays at crossings could increase by 300%, and that is a grave concern not only for southern California but to the manufacturers awaiting parts in Kansas City and elsewhere. These projects, both of which received large congressionally directed Projects of National and Regional Significance funding in 2005, clearly illustrate the catalytic role that Federal investments can play in financing freight projects. Moreover, it is extremely difficult for individual States to dedicate a significant part of their limited infrastructure investment resources to one of these high-cost projects because freight does not vote. We have often said this country is governed by a one-person, one-vote rule, but not a one-container, one-vote rule, and freight, as a result, sometimes gets short shrift. The cost of these projects are extremely high, often in the billions of dollars, and the benefits are diffuse. Thus, States are often unwilling to expend their limited Federal and State resources on these big-ticket investments, especially when voters are much more interested in seeing ribbon cuttings that will benefit them directly for things like highways, mass transit, and commuter rail. However, the Federal Government can weigh the broader job creation, economic, environmental and trade export benefits of these projects. It is for these reasons that I strongly support providing guaranteed Federal funding and a robust program of guaranteed.

With the Los Angeles region having the sixth largest economy in the world, southern California’s freight transportation challenges are the Nation’s challenges. Fortunately, the Nation is exceptionally well served by the complex and continually improving southern California freight system. The region’s seaports, airports, ports of entry, railroads, roadways, and intermodal yards, as well as trans-loading facilities and warehouses not only support the freight mobility that serves approximately 40% of the Nation’s international container shipments, but it also clearly is the greenest and the cleanest of any part of the national system, if not on the planet. This unparalleled freight volume that we have coming through southern California does indeed present challenges to the region, but also impacts the Nation. The State of California and the southern California region have been very proactive in addressing many of those challenges, resulting in reduced regional impacts and sustained benefits to the Nation. There is also a need for a stronger Federal presence, we believe, and a need for a greater level of Federal fiscal involvement in addressing the southern California freight issues as a result. We believe a dedicated source of freight funding is needed that does not siphon funding from other transportation funds that are also very important. As the ninth largest economy in the world, California has long recognized the need to support the freight industry so that our economy will continue to be a global leader. In 2007, the State issued a comprehensive State freight plan known as the Goods Movement Action Plan.

In 2006, Prop 1–B bond program devoted $2 billion to the Trade Corridor Improvement Fund. The bond funds attracted a wide range of additional private, local, regional and Federal funds, resulting in a current program of about 69 freight projects valued at about $6.5 billion, with the majority of those projects in southern California. The Trade Corridor Improvement Funds project included seven seaport projects to the tune of $1.3 billion; six railroad projects, about half-a-billion of that; about 28 railroad grade crossing projects, about $2 billion of that; and about 15 highway projects, to the tune of about $1.4 billion.

Scott Moore, VP public affairs, Union Pacific Railroad

Union Pacific is 151 years old and operates in 23 States on 32,000 miles of track.

When we talk about investing in infrastructure, our railroad last year spent about $3.7 billion, this year will spend about $3.6 billion. To give you an idea of what that may buy, last year we installed 4.1 million new railroad ties across our system and replaced over 1,000 miles of track, all the while continuing to invest in terminal facilities, as well as in new locomotives.

Our business in California is varied, but certainly intermodal is key. In our intermodal franchise, there are really two parts to it. There is the international container traffic which passes through the west coast ports primarily in 20-, 40-, or 45-foot containers. The domestic business includes container and trailer traffic traveling primarily in 53-foot containers. Additionally, less than truckload and package carriers with time-sensitive business requirements are also an important part of that domestic shipment. Union Pacific overall in our system, 54% of that intermodal traffic is international, 46% is domestic.

Much of this intermodal traffic flows through, in and out of the L.A. Basin. In our network, we operate 10 intermodal facilities, four of which are here in the L.A. Basin. Two of those, our intermodal container transfer facility by the port and our East L.A. yard, are two of our top-producing intermodal yards. The four L.A. Basin facilities combined just do over 1 million lifts. This compares to 4 million across our system, and compares to a second one in Chicago with 1.4 million lifts.

While we have a number of routes into and out of the L.A. Basin, our main corridor is what we call our Sunset Corridor. This line runs across Arizona to New Mexico to El Paso. Once in Texas, that line branches out, where we have the ability to serve Chicago via Kansas City, Memphis via Dallas, and New Orleans via southern Texas. We have invested well over $1 billion in the last 10 years, double tracking this line, L.A. to El Paso, and at the end of last year we were 70% complete.

Even with the expansion of the Panama Canal, we expect traffic to continue to increase into and out of the L.A. Basin ports.

In 2005, we worked with the Alameda Corridor Transportation Authority to develop a pilot here in Colton. It ultimately did not work. There wasn’t a business model to make it work. More recently, Mr. Ikhrata and SCAG did a study on that as well, and once again the economics don’t work. That sort of movement, because of the additional lifts, additional labor, consuming rail capacity, it cannot be price competitive today with a truck move.

Mr. Michael K. FOX. CEO Fox Transportation.

In the Inland Empire, there is 1.7 billion square feet of warehouse and distribution space. It is massive and it is growing. Each day we truck 10,000 containers to the Inland Empire.

In 2006, when the Long Beach and Los Angeles Port reached record numbers, we did more with the same number of vehicles and trucks than we do today. In 2006, there were five night gates. Today we only have four night gates. In 2006, the terminals were open during lunch and breaks. Now they close for 2 hours on those four night gates. That creates congestion in the terminals and a lack of productivity. In 2006, most terminals had wheeled operations where the containers were on the wheels waiting for the drivers, and that is what drivers do: deliver. They shouldn’t be sitting in the port terminals, and that is what they do today. Today it is a grounded operation at all terminals. That means as the containers come off the ships, they are placed on chassis, they are stacked, and drivers now must enter a port terminal at all 13 terminals, get in line to find a chassis, get in line to have a container stacked onto a chassis, get in another line to out-gate, and this takes about 2 hours as an average today. This is not the best utilization of the drivers’ time, and it certainly affects the supply chain. The near-term solution to this is to implement five night gates, Sunday through Thursday night. Sunday is when there is the least amount of traffic on our local freeway system, so we can deliver a lot of freight on Sunday night. In 2013, we are starting to approach the 2006 record year that was set by both ports.

In 2006, one truck could deliver four to five loads to greater Los Angeles. It could deliver three loads here to the Inland Empire. Today, volumes are approaching 2006 levels. That is the good news. The bad news is that that same truck can only do two loads to L.A.; it used to do five. It can only do one or two to the Inland Empire; it used to do three. And again, that is all because of decisions made by terminal operators.

It is not about labor, because it is the same labor force we had in 2006. It is about terminal operators making decisions to have less labor, close down for lunch, put containers on a grounded operation rather than wheeled, and only have four nights. All three of those areas can be changed immediately, and we can be more efficient as these volumes grow for the next few years. We can handle the volumes with the 9,000 trucks that are servicing the ports today. We don’t even really need 9,000 trucks. We need 7,000 trucks for today’s volume. As it grows, we will need the 9,000. But 5 years from now, that will not be enough trucks. Sending another 3,000 or 4,000 or 5,000 trucks to the port creates more congestion not only in the port terminal but on the freeways.

I think there is money that is being spent State and federally on our highway system. As a trucker, I am saying let’s stop spending money on the highway system. Let’s get the UP or the BN involved and have a daily shuttle train and take 500 to 1,000 trucks off the road going between the port and the Inland Empire daily.

Something that the committee should really look at, and that is the establishment of an inland port here in the Inland Empire. With the massive distribution network that we have here in the Inland Empire, we need an inland port.

And the answer is not sending more trucks into the port. That is not the answer. I am a trucking guy who says don’t send more trucks to the port. The answer is put the containers on a train that is located within the port complex, rail those containers to the inland port here in the Inland Empire, reposition our trucks from our trucking community out here and do local trucking. We can do a lot more trucking and a lot more deliveries if we are not wasting time on public highways and sitting in lines at the port terminals. It also creates more space for the port terminals, which they desperately need. I know we are talking about adding lanes on other freeways throughout the southern California area. In fact, the 710, we are talking about adding two lanes at the cost of $6 billion. We probably need the lanes, but at $330 million per mile and the time it takes to build those lanes, I think this is a much better way to use the money, and that is let’s utilize the various modes of transportation, get trucks off the freeway, clean up the environment, and have better utilization of our vehicles.

Mr. RICHMOND. Former CEO Alameda Corridor-East Construction Authority

The area that I work for is San Gabriel Valley in Los Angeles County, but the three other counties surrounding it are also involved in the same work that we are doing. Mention has been made of policy. There is clearly a policy in southern California to shift the modes out of the ports more in the direction of rail and away from truck, and that is a strategy that involves congestion relief, air quality improvements, and a whole lot of other related activities. But for us involved in the communities out there along the rail lines, there are some other effects that are resulting from that. Currently on that network that you see there, there are about 100 trains a day operating, and when we say trains, we are talking about typically a mile to 2-mile-long trains. These are not minor train movements. They are major. That is projected to grow to upwards of 250 trains a day with the increase in traffic coming through the ports. There are 131 grade crossings in that area shown on the map. So there are 131 places where the train basically stops cross-traffic to get through.

Jerrold NADLER, NEW YORK. Everyone seems to agree that State and local funding sources are not sufficient to do the freight projects that are necessary. Everyone agrees the freight projects must be funded on a multimodal basis. Everybody agrees that we need a significant Federal source of funding to supplement State and local efforts. Everybody agrees that that funding source should be available for freight and separate from the Highway Trust. And I think I heard everybody agree that it should be done on a competitive basis and not on a State formula basis.

Mr. FOX. Well, sometimes the most critical things are the most obvious things. There are two issues, near-term and long-term. Look, the ports were never more efficient than they were in 2006 when business was good. So that is part of the obvious answer to this, is that there was more volume that justified more labor. It justified having wheeled operations. The terminals are getting away from providing chassis. It is a very complex issue, and I don’t mean to oversimplify it. It is a very complex issue, no doubt about it. The bottom line here is there are so many stakeholders involved, the steamship lines, the terminal operators. I don’t think labor is even part of the issue at all. I think it is the people paying the bills. And if we don’t get the people paying the bills to correct the situation, as volumes grow we are going to have more congestion and the Panama Canal is going to start looking a lot better.

Mr. HANNA, NEW YORK. So implicit in what you are saying is that there is enough money to go around to allow this inefficiency to continue, and there is nobody invested in stopping it?

Mr. FOX. The different stakeholders are so focused on their own budgets that they are not looking long term at the big picture.

The deep channel ‘‘depth’’ where the larger ships can come in, very unique for this country, is a competitive advantage for Long Beach and L.A. I think there are 50- and 53-foot depths, and that is where the steamship lines went. They went to larger cargo vessels with many more containers, up to 18,000 TEUs, with less sailings. That is cost competitive. That creates immediate congestion when you dump 18,000 containers into a terminal.

For the long term, yes, it is complicated for the UP or the BN to provide a shuttle train to an inland port. But let me also say that based on the trucking rates, where they are today versus when the studies were done 10 or 15 years ago, that gap has come down quite a bit. There is not a big gap between trucking a container from the Long Beach Port or L.A. Port to the Inland Empire versus putting 250 containers on a train and amortizing that cost over 250 containers. That gap is shrinking. It is much smaller.

Mr. IKHRATA, executive director of the Southern California Association of Governments. Just to tell you how complex this is, the inland port issue was looked at several times. But remember that 80% of the truck traffic is not port related. It is due to manufacturing that ends up on the highway but goes to the warehousing. So that makes the concept much more challenging. If every truck that we are talking about is coming from the port, going in one route and going to the warehousing, that is one thing. But a lot of it is related to manufacturing along the freight corridors, so that makes the concept harder.

Ms. PRIMMER, Executive Director, Mobility 21. The Federal Government needs to take the growth of Canadian and Mexican ports very seriously. They pose a competitive threat to the U.S. west coast ports and the millions of jobs they support. However, the most effective response to this competition is for the U.S. to develop a national freight strategy with clear alignment at the State, local, and Federal levels. A national strategy was developed in Canada, and that is a big part of the reason why they have been so effective.


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Earth has lost a third of arable land in past 40 years

Milman, O. December 2, 2015. Earth has lost a third of arable land in past 40 years, scientists say. The Guardian.

The world has lost a third of its arable land due to erosion or pollution in the past 40 years, with potentially disastrous consequences as global demand for food soars. Nearly 33% of the world’s adequate or high-quality food-producing land has been lost at a rate that far outstrips the pace of natural processes to replace diminished soil.

The continual plowing of fields, combined with heavy use of fertilizers, has degraded soils across the world, the research found, with erosion occurring at a pace of up to 100 times greater than the rate of soil formation. It takes around 500 years for just 1 inch (2.5 cm) of topsoil to be created amid unimpeded ecological changes.

The University of Sheffield’s Grantham Centre for Sustainable Futures, which undertook the study by analyzing various pieces of research published over the past decade, said the loss was “catastrophic” and the trend close to being irretrievable without major changes to agricultural practices. “You think of the dust bowl of the 1930s in North America and then you realize we are moving towards that situation if we don’t do something,” said Duncan Cameron, professor of plant and soil biology at the University of Sheffield.

“We are increasing the rate of loss and we are reducing soils to their bare mineral components,” he said. “We are creating soils that aren’t fit for anything except for holding a plant up. The soils are silting up river systems – if you look at the huge brown stain in the ocean where the Amazon deposits soil, you realize how much we are accelerating that process.

The erosion of soil has largely occurred due to the loss of structure by continual disturbance for crop planting and harvesting. If soil is repeatedly turned over, it is exposed to oxygen and its carbon is released into the atmosphere, causing it to fail to bind as effectively. This loss of integrity impacts soil’s ability to store water, which neutralizes its role as a buffer to floods and a fruitful base for plants. Degraded soils are also vulnerable to being washed away by weather events fueled by global warming. Deforestation, which removes trees that help knit landscapes together, is also detrimental to soil health.

The steep decline in soil has occurred at a time when the world’s demand for food is rapidly increasing. It’s estimated the world will need to grow 50% more food by 2050 to feed an anticipated population of 9 billion people.  [Yet already, much of the world’s land is already being used to grow food]…Around 30% of the world’s ice-free surfaces are used to keep chicken, cattle, pigs and other livestock, rather than to grow crops.

Read a summary of the paper here as well: Grantham Centre briefing note: December 2015 A sustainable model for intensive agriculture


Posted in Scientists Warnings to Humanity, Soil, Topsoil | Tagged , , , | Comments Off on Earth has lost a third of arable land in past 40 years