Electromagnetic pulse threat to infrastructure: U.S. House hearings 2012 & 2014

Posted on January 24, 2016 by

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In 2012 and again in 2014, the U.S. House of Representatives held hearings on the threat of electromagnetic pulses — from either the sun or nuclear blasts — to critical U.S. infrastructure.  The testimony at these hearings could be mistaken for a grade B science fiction movie.  But it’s not a Hollywood thriller.  Below are excerpts from the transcripts of the 2012 and 2014 hearings.

Chair, Michael McCaul (Texas). Some would say it is a low probability, but the damage that could be caused in the event of an EMP attack both by the sun, a solar event, or a man-made attack would be catastrophic. We talk a lot about a nuclear bomb in Manhattan, and we talk about a cybersecurity threat, the grid, power grid, in the Northeast, and all these things would actually probably pale in comparison to the devastation that an EMP attack could perpetrate on Americans. We have extraordinary capability in this country to do great things. We are a responsible Nation with our power and with our might. But a nation, a rogue nation, with that type of capability in the wrong hands could be devastating.

Side note: House Rep McCaul has just come out with a 2016 book “Failures of Imagination: The Deadliest Threats to Our Homeland–and How to Thwart Them”.   Yet this book doesn’t mention the threat of an electromagnetic pulse (EMP). He doesn’t explain why EMP is no longer a threat, so he’s lost credibility with me, and I won’t be buying his book and reviewing it.

VICE CHAIRMAN SCOTT PERRY (Pennsylvania): In 1962, the United States conducted a test named STARFISH Prime where the military detonated a 1.4-megaton thermonuclear bomb about 25 miles above Johnston Atoll in the in the Pacific. In space, six American, British, and Soviet satellites suffered damage, and 800 miles away in Hawaii, burglar alarms sounded, street lights blinked out, and phones, radios, and televisions went dead. While only 1 percent of the existing street lights were affected, it became clear that electromagnetic pulse, or EMP, could cause significant damage.

EMP is simply a burst of electromagnetic radiation that results from certain types of high-energy explosions or from a suddenly fluctuating magnetic field. A frightening point is that EMP can be generated by nuclear weapons, from naturally-occurring sources such as solar storms, or specialized non-nuclear EMP weapons.

Nuclear weapon EMPs are most catastrophic when a nuclear weapon is detonated at a high altitude at approximately 30 kilometers, or 20 miles, above the intended target. The consequences of such an attack could be catastrophic. All electronics, power systems, and information systems could be shut down. This could then cascade into interdependent infrastructure such as water, gas, and telecommunications. While we understand that this is an extreme case, we must always be prepared in case a rogue state decides to utilize this technology.

Currently the nations of Russia and China have the technology to launch an EMP attack, and we have speculated that Iran and North Korea may be developing EMP weapon technology

Since most critical infrastructure, particularly electrical infrastructure is in the hands of private owners, the Federal Government has limited authority to mandate preparedness. DHS has no statutory authority whatsoever to regulate the electric grid.

Trent Franks (Arizona): With each passing year, our society becomes increasingly dependent on technology and an abundant supply of electricity. Our entire American way of life relies upon electrical power and technology. Our household appliances, food-distribution systems, telephone and computer networks, communication devices, water and sewage plants would grind to a halt without it. Nearly every single facet of modern human life in America is susceptible to being crippled by a major Electromagnetic Pulse or Geomagnetic Disturbance event. We are so reliant on our electric power grid that we specifically consider it ‘‘critical infrastructure’’.

Chairman and Members of the committee, it strikes at my very core when I think of the men, women, and children in cities and rural towns across America with a possibility of no access to food, water, or transportation. In a matter of weeks or months at most, a worst-case scenario could bring devastation beyond imagination.

The effects of geomagnetic storms and electromagnetic pulses on electric infrastructure are well-documented, with nearly every space, weather, and EMP expert recognizing the dramatic disruptions and cataclysmic collapses these pulses can bring to electric grids. In 2008, the EMP Commission testified before The Armed Services Committee, of which I am a member, that the U.S. society and economy are so critically dependent upon the availability of electricity that a significant collapse of the grid, precipitated by a major natural or man-made EMP event, could result in catastrophic civilian casualties. This conclusion is echoed by separate reports recently compiled by the DOD, DHS, DOE, NAS, along with various other Government agencies and independent researchers. All came to very similar conclusions. We now have 11 Government studies on the severe threat and vulnerabilities we face from EMP and GMD.

We have known the potentially devastating effects of sufficiently intense electromagnetic pulse on the electronic systems and its risk to our National security. More troubling, our enemies know.

More than a year ago, an unknown number of shooters with AK–47s knocked out 17 large transformers during a highly-choreographed assault on the PG&E Metcalf Transmission Substation in California. While the power company was able to avoid blackouts, the damage to the facility took nearly 4 weeks to repair.

This is not an isolated incident and world-wide adversaries are taking notice in the vulnerability of our grid.

We as a Nation have spent billions of dollars over the years hardening our nuclear triad, our missile-defense capabilities, and numerous other critical elements of our National security apparatus against the effects of electromagnetic pulse, particularly the type of electromagnetic pulse that might be generated against us by an enemy.

However, our civilian grid, which the Defense Department relies upon for nearly 99% of its electricity needs, is completely vulnerable to the same kind of danger. This constitutes an invitation on the part of certain enemies of the United States to use the asymmetric capability of an EMP weapon against us.

We also face the threat of a natural EMP event. Since the last occurrence of a major geomagnetic storm in 1921, the Nation’s high-voltage and extra-high- voltage systems have increased in size more than ten-fold.

HON. PETE SESSIONS: The possibility that a single nuclear weapon detonated in space high over this country could unleash intense electromagnetic pulses (EMP), disrupting for many months—if not indefinitely—the supply of power to large area. Until recently, information about EMP was Classified and many of us have little knowledge of the serious danger such threats represents to everything we hold dear.

Dr. William Graham, the chairman of the EMP Threat Commission, believes that, if the power goes out and stays out for even 1 year’s time, as many as 9 out of 10 of us would perish.

we need not face such a horrific prospect. We know how to protect electrical and electronic devices from the effects of EMP. In fact, the Department of Defense has been doing it with respect to the military’s nuclear deterrent and command-and-control systems for over 50 years. There are, in short, proven and easily implementable techniques that can now be applied to ensure the resilience ofthe U.S. electric grid and the things that depend upon it in 21st Century America—which is just about everything.

Dr. Peter Vincent Pry is the executive director of the Task Force on National and Homeland Security, a Congressional advisory board dedicated to achieving protection of the United States from electromagnetic pulse and other threats. Dr. Pry is also the director of the United States Nuclear Strategy Forum, an advisory body to Congress on policies to counter weapons of mass destruction. Dr. Pry has served on the staffs of the Congressional Commission on the Strategic Posture of the United States, the Commission to Assess the Threat to the U.S. from an EMP Attack, the House Armed Services Committee, as an intelligence officer with the CIA, and as a verification analyst at the U.S. Arms Control and Disarmament Agency.

Mr. PRY.  Natural EMP from a geomagnetic super-storm like the 1859 Carrington Event or the 1921 Railroad Storm, a nuclear EMP attack from terrorists or rogue states as practiced by North Korea during the nuclear crisis of 2013 are both existential threats that could kill 9 of 10 Americans through starvation, disease, and societal collapse.

A natural EMP catastrophe or nuclear EMP attack could black out the National electric grid for months or years and collapse all the other critical infrastructures, communications, transportation, banking and finance, food and water, necessary to sustain modern society and the lives of 310 million Americans.

EMP is a clear and present danger:

  • A Carrington-class coronal mass ejection narrowly missed the earth in July 2012.
  • Last April, during the nuclear crisis with North Korea over Kim Jong-Un’s threatened nuclear strikes against the United States, Pyongyang apparently practiced an EMP attack with its KSM–3 satellite that passed over the U.S. heartland and over the Washington, D.C.- New York City corridor.
  • Iran, estimated to be within 2 months of nuclear weapons by the administration, has a demonstrated capability to launch an EMP attack from a vessel at sea. The Iranian Revolutionary Guard Navy commenced patrols off the East Coast of the United States in February.

An EMP attack is a high-tech means of killing millions of people the old-fashioned way—through starvation, disease, and societal collapse.

A single nuclear weapon detonated at high altitude will generate an electromagnetic pulse that can cause catastrophic damage across the entire contiguous United States to the critical infrastructures—electric power, telecommunications, transportation, banking and finance, food and water—that sustain modern civilization and the lives of 310 million Americans. Nature can also generate an EMP causing similarly catastrophic consequences across the entire contiguous United States— or even across the entire planet—by means of a solar flare from the Sun that causes on Earth a great geomagnetic storm. Non-nuclear weapons, often referred to as radio frequency weapons, can also generate an EMP, much more limited in range than a nuclear weapon, that can damage electronics, and could cause the collapse of critical infrastructures locally, perhaps with cascading effects over an area as large as a major city.

Any nuclear warhead detonated at high altitude, 30 kilometers (18.6 miles) or more above the Earth’s surface, will generate an electromagnetic pulse. The immediate effects of EMP are disruption of, and damage to, electronic systems and electrical infrastructure. EMP is not reported in the scientific literature to have direct harmful effects on people. Because an EMP attack would detonate a nuclear warhead at high-altitude, no other nuclear effects—such as blast, thermal radiation, or radioactive fallout—would be experienced by people on the ground or flying through the atmosphere. However, because modern civilization and life itself now depends upon elec Gamma rays, and the fireball from a high-altitude nuclear detonation, interact with the atmosphere to produce a super-energetic radio wave—the EMP—that covers everything within line-of-sight from the explosion to the Earth’s horizon.

Even a relatively low-altitude EMP attack, where the nuclear warhead is detonated at an altitude of 30 kilometers, will generate a damaging EMP field over a vast area, covering a region equivalent to New England, all of New York, and half of Pennsylvania. A nuclear weapon detonated at an altitude of 400 kilometers (~250 miles) over the center of the United States would place an EMP field over the entire contiguous United States and parts of Canada and Mexico.

It is a myth is that rogue states or terrorists need a sophisticated intercontinental ballistic missile to make an EMP attack. In fact, any missile, including short- range missiles that can deliver a nuclear warhead to an altitude of 30 kilometers or more, can make a catastrophic EMP attack on the United States, by launching off a ship or freighter. Indeed, Iran has practiced ship-launched EMP attacks using Scud missiles—which are in the possession of scores of nations and even terrorist groups. An EMP attack launched off a ship, since Scuds are common-place and a warhead detonated in outer space would leave no bomb debris for forensic analysis, could enable rogue states or terrorists to destroy U.S. critical infrastructures and kill millions of Americans anonymously.

The EMP generated by a nuclear weapon has three components, designated by the U.S. scientific-technical community E1, E2, and E3.

E1 is caused by gamma rays, emitted by the nuclear warhead, that knocks electrons off of molecules in the upper atmosphere, causing the electrons to rotate rapidly around the lines of the Earth’s magnetic field, a phenomenon termed the Compton Effect. The E1 component of nuclear EMP is a shockwave, transmitting thousands of volts of energy in mere nanoseconds of time, and having a high-frequency (short) wavelength that can couple directly into small objects, like personal computers, automobiles, and transformers. E1 is unique to nuclear weapons and is too fast and too energetic to be arrested by protective devices used for lightning.

The E2 component of a nuclear EMP is comparable to lightning in its energetic content and medium (milliseconds) frequency and wavelength. Protective devices used for lightning are effective against E2.

E3 is caused by the fireball of a nuclear explosion, the expanding and then collapsing fireball causing the Earth’s magnetic field to oscillate, generating electric currents in the very large objects that can couple into the low frequency, long (seconds) wavelength part of the EMP that is E3. The E3 waveform can couple directly only into objects having at least one dimension of great length. Electric power and telecommunications lines that run for kilometers in many directions are ideally suited for receiving E3. Although E3 compared to E1 appears to deliver little energy, just volts per meter, this is multiplied manifold by power and telecommunications lines that are typically many kilometers long, building up E3 currents that can melt Extremely High-Voltage (EHV) transformers, typically designed to handle 750,000 volts. Small electronics can also be destroyed by E3 if they are connected in any way to an E3 receiver—like a personal computer plugged into an electric outlet, which of course is connected to power lines that are ideal E3 receivers, or like the electronic servo-mechanisms that operate the controls of large passenger airliners, that can receive E3 through the metal skin of the aircraft wings and body. Protective devices used for lightning are not effective against E3.

The Soviets executed a series of nuclear detonations in which they exploded 300 kiloton weapons at approximately 300, 150, and 60 kilometers above their test site in South Central Asia. They report that on each shot they observed damage to overhead and underground buried cables at distances of 600 kilometers. They also observed surge arrestor burnout, spark-gap breakdown, blown fuses, and power supply breakdowns.

A high-yield nuclear weapon is not necessary to make an EMP attack. Although a high-yield weapon will generally make a more powerful EMP field than a low- yield nuclear weapon, ALL nuclear weapons produce gamma rays and EMP. The EMP Commission found, by testing modern electronics in simulators, that ANY nuclear weapon can potentially make a catastrophic EMP attack on the United States. Even a very low-yield nuclear weapon—like a 1-kiloton nuclear artillery shell—will produce enough EMP to pose a catastrophic threat. This is so in part because the U.S. electric grid is so aged and overburdened, and because the high-tech electronics that support the electric grid and other critical infrastructures are over 1 million times more vulnerable to EMP than the electronics of the 1960s.

The EMP Commission also found that, contrary to the claim that high-yield nuclear weapons are necessary for an EMP attack, that very low-yield nuclear weapons of special design can produce significantly more EMP than high-yield nuclear weapons. The EMP Commission found further that Russia, probably China, and possibly North Korea are already in possession of such weapons. Russian military writings call these ‘‘Super-EMP’’ nuclear weapons, and credibly claim that they can generate 200 kilovolts per meter—many times the 30 KVs/meter attributed to a high-yield (20 megaton) nuclear weapon of normal design. Yet a Super-EMP warhead can have a tiny explosive yield, perhaps only 1 kiloton, because it is specially designed to produce primarily gamma rays that generate the E1 electromagnetic shockwave component of the EMP effect. Super-EMP weapons are specialized to generate an overwhelming E1, and produce no E2 or E3 but do not need to, as their E1 is so potent.

In 2004, credible Russian sources warned the EMP Commission that design information and ‘‘brain drain’’ from Russia had transferred to North Korea the capability to build a Super-EMP nuclear weapon ‘‘within a few years.’’ In 2006 and again in 2008, North Korea tested a nuclear device of very low yield, 1–3 kilotons, and declared these tests successful. South Korean military intelligence, in open-source reporting, independently corroborates the Russian warning that North Korea is developing a Super-EMP nuclear warhead. North Korea’s proclivity to sell anything to anyone, including missiles and nuclear technology to fellow rogue nations Iran and Syria, makes Pyongyang’s possession of Super-EMP nuclear weapons especially worrisome.

Geomagnetic storms rarely affect the United States, but regularly damage nations located at high northern latitudes, such as Canada, Norway, Sweden, Finland, and Russia. Damage from a normal geomagnetic storm can be severe. For example, in 1989 a geomagnetic storm over Canada destroyed the electric power grid in Quebec. The EMP Commission was the first to discover and report in 2004 that every hundred years or so the Sun produces a great geomagnetic storm. Great geomagnetic storms produce effects similar to the E3 EMP from a multi-megaton nuclear weapon, and so large that it would cover the entire United States—possibly even the entire planet.

Geomagnetic storms, even great geomagnetic storms, generate no E1 or E2, only E3, technically called the magnetohydrodynamic EMP. Nonetheless, E3 alone from a great geomagnetic storm is sufficient to end modern civilization. The EMP produced, given the current state of unpreparedness by the United States and every nation on Earth, could collapse power grids everywhere on the planet and destroy EHV transformers and other electronic systems that would require years to repair or replace.

Modern civilization cannot exist for a protracted period without electricity. Within days of a blackout across the United States, a blackout that could encompass the entire planet, emergency generators would run out of fuel, telecommunications would cease as would transportation due to gridlock, and eventually no fuel. Cities would have no running water and soon, within a few days, exhaust their food supplies. Police, Fire, Emergency Services and hospitals cannot long operate in a blackout. Government and industry also need electricity in order to operate.

The EMP Commission warns that a natural or nuclear EMP event, given current unpreparedness, would likely result in societal collapse.

Terrorists, criminals, and even lone individuals can build a non-nuclear EMP weapon without great trouble or expense, working from Unclassified designs publicly available on the internet, and using parts available at any electronics store. In 2000, the Terrorism Panel of the House Armed Services Committee sponsored an experiment, recruiting a small team of amateur electronics enthusiasts to attempt constructing a radiofrequency weapon, relying only on unclassified design information and parts purchased from Radio Shack. The team, in 1 year, built two radiofrequency weapons of radically different designs. One was designed to fit inside the shipping crate for a Xerox machine, so it could be delivered to the Pentagon mail room where (in those more unguarded days before 9/11) it could slowly fry the Pentagon’s computers. The other radiofrequency weapon was designed to fit inside a small Volkswagon bus, so it could be driven down Wall Street and disrupt computers— and perhaps the National economy. Both designs were demonstrated and tested successfully during a special Congressional hearing for this purpose at the U.S. Army’s Aberdeen Proving Ground.

Radiofrequency weapons are not merely a hypothetical threat. Terrorists, criminals, and disgruntled individuals have used home-made radiofrequency weapons. The U.S. military and foreign militaries have a wide variety of such weaponry. Moreover, non-nuclear EMP devices that could be used as radiofrequency weapons are publicly marketed for sale to anyone, usually advertised as ‘‘EMP simulators.’’ For example, one such simulator is advertised for public sale as an ‘‘EMP Suitcase.’’ This EMP simulator is designed to look like a suitcase, can be carried and operated by one person, and is purpose-built with a high energy radiofrequency output to destroy electronics. However, it has only a short radius of effect. Nonetheless, a terrorist or deranged individual who knows what he is doing, who has studied the electric grid for a major metropolitan area, could—armed with the ‘‘EMP Suitcase’’— black out a major city.

A CLEAR AND PRESENT DANGER. An EMP weapon can be used by state actors who wish to level the battlefield by neutralizing the great technological advantage enjoyed by U.S. military forces. EMP is also the ideal means, the only means, whereby rogue states or terrorists could use a single nuclear weapon to destroy the United States and prevail in the War on Terrorism or some other conflict with a single blow. The EMP Commission also warned that states or terrorists could exploit U.S. vulnerability to EMP attack for coercion or blackmail: ‘‘Therefore, terrorists or state actors that possess relatively unsophisticated missiles armed with nuclear weapons may well calculate that, instead of destroying a city or military base, they may obtain the greatest political-military utility from one or a few such weapons by using them—or threatening their use—in an EMP attack.’’

The EMP Commission found that states such as Russia, China, North Korea, and Iran have incorporated EMP attack into their military doctrines, and openly describe making EMP attacks against the United States. Indeed, the EMP Commission was established by Congress partly in response to a Russian nuclear EMP threat made to an official Congressional Delegation on May 2, 1999, in the midst of the Balkans crisis. Vladimir Lukin, head of the Russian delegation and a former Ambassador to the United States, warned: ‘‘Hypothetically, if Russia really wanted to hurt the United States in retaliation for NATO’s bombing of Yugoslavia, Russia could fire an SLBM and detonate a single nuclear warhead at high altitude over the United States. The resulting EMP would massively disrupt U.S. communications and computer systems, shutting down everything.’’

China’s military doctrine also openly describes EMP attack as the ultimate asymmetric weapon, as it strikes at the very technology that is the basis of U.S. power. Where EMP is concerned, ‘‘The United States is more vulnerable to attacks than any other country in the world’’: ‘‘Some people might think that things similar to the ‘Pearl Harbor Incident’ are unlikely to take place during the information age. Yet it could be regarded as the ‘Pearl Harbor Incident’ of the 21st Century if a surprise attack is conducted against the enemy’s crucial information systems of command, control, and communications by such means as… electromagnetic pulse weapons… Even a superpower like the United States, which possesses nuclear missiles and powerful armed forces, cannot guarantee its immunity…In their own words, a highly computerized open society like the United States is extremely vulnerable to electronic attacks from all sides. This is because the U.S. economy, from banks to telephone systems and from power plants to iron and steel works, relies entirely on computer networks… When a country grows increasingly powerful economically and technologically…it will become increasingly dependent on modern information systems… The United States is more vulnerable to attacks than any other country in the world.’’

Iran—the world’s leading sponsor of international terrorism—in military writings openly describes EMP as a terrorist weapon, and as the ultimate weapon for prevailing over the West: ‘‘If the world’s industrial countries fail to devise effective ways to defend themselves against dangerous electronic assaults, then they will disintegrate within a few years… American soldiers would not be able to find food to eat nor would they be able to fire a single shot.’’

The threats are not merely words. The EMP Commission assesses that Russia has, as it openly declares in military writings, probably developed what Russia describes as a ‘‘Super-EMP’’ nuclear weapon—specifically designed to generate extraordinarily high EMP fields in order to paralyze even the best protected U.S. strategic and military forces. China probably also has Super-EMP weapons. North Korea too may possess or be developing a Super-EMP nuclear weapon, as alleged by credible Russian sources to the EMP Commission, and by open-source reporting from South Korean military intelligence. But any nuclear weapon, even a low-yield first generation device, could suffice to make a catastrophic EMP attack on the United States. Iran, although it is assessed as not yet having the bomb, is actively testing missile delivery systems and has practiced launches of its best missile, the Shahab–III, fuzing for high- altitude detonations, in exercises that look suspiciously like training for making EMP attacks. As noted earlier, Iran has also practiced launching from a ship a Scud, the world’s most common missile—possessed by over 60 nations, terrorist groups, and private collectors.

A Scud might be the ideal choice for a ship-launched EMP attack against the United States intended to be executed anonymously, to escape any last-gasp U.S. retaliation. Unlike a nuclear weapon detonated in a city, a high-altitude EMP attack leaves no bomb debris for forensic analysis, no perpetrator ‘‘fingerprints.’’ Under present levels of preparedness, communications would be severely limited, restricted mainly to those few military communications networks that are hardened against EMP.

Today’s microelectronics are the foundation of our modern civilization, but are over 1 million times more vulnerable to EMP than the far more primitive and robust electronics of the 1960s, that proved vulnerable during nuclear EMP tests of that era. Tests conducted by the EMP Commission confirmed empirically the theory that, as modern microelectronics become ever smaller and more efficient, and operate ever faster on lower voltages, they also become ever more vulnerable, and can be destroyed or disrupted by much lower EMP field strengths.

Microelectronics and electronic systems are everywhere, and run virtually everything in the modern world. All of the civilian critical infrastructures that sustain the economy of the United States, and the lives of 310 million Americans, depend, directly or indirectly, upon electricity and electronic systems.

Of special concern is the vulnerability to EMP of the Extra-High-Voltage (EHV) transformers, that are indispensable to the operation of the electric grid. EHV transformers drive electric current over long distances, from the point of generation to consumers (from the Niagara Falls hydroelectric facility to New York City, for example). The electric grid cannot operate without EHV transformers—which could be destroyed by an EMP event. The United States no longer manufactures EHV transformers. They must be manufactured and imported from overseas, from Germany or South Korea, the only two nations in the world that manufacture such transformers for export. Each EHV transformer must be custom-made for its unique role in the grid. A single EHV transformer typically requires 18 months to manufacture. The loss of large numbers of EHV transformers to an EMP event would plunge the United States into a protracted blackout lasting years, with perhaps no hope of eventual recovery, as the society and population probably could not survive for even 1 year without electricity.

Another key vulnerability to EMP are Supervisory Control And Data Acquisition systems (SCADAs). SCADAs essentially are small computers, numbering in the millions and ubiquitous everywhere in the critical infrastructures, that perform jobs previously performed by hundreds of thousands of human technicians during the 1960s and before, in the era prior to the microelectronics revolution. SCADAs do things like regulating the flow of electricity into a transformer, controlling the flow of gas through a pipeline, or running traffic control lights. SCADAs enable a few dozen people to run the critical infrastructures for an entire city, whereas previously hundreds or even thousands of technicians were necessary. Unfortunately, SCADAs are especially vulnerable to EMP.

EHV transformers and SCADAs are the most important vulnerabilities to EMP, but are by no means the only vulnerabilities. Each of the critical infrastructures has their own unique vulnerabilities to EMP:

The National electric grid, with its transformers and generators and electronic controls and thousands of miles of power lines, is a vast electronic machine—more vulnerable to EMP than any other critical infrastructure. Yet the electric grid is the most important of all critical infrastructures, and is in fact the keystone supporting modern civilization, as it powers all the other critical infrastructures. As of now it is our technological Achilles Heel. The EMP Commission found that, if the electric grid collapses, so too will collapse all the other critical infrastructures. But, if the electric grid can be protected and recovered, so too all the other critical infrastructures can also be restored.

Transportation is a critical infrastructure because modern civilization cannot exist without the goods and services moved by road, rail, ship, and air. Cars, trucks, locomotives, ships, and aircraft all have electronic components, motors, and controls that are potentially vulnerable to EMP. Gas stations, fuel pipelines, and refineries that make petroleum products depend upon electronic components and cannot operate without electricity. Given our current state of unpreparedness, in the aftermath of a natural or nuclear EMP event, transportation systems would be paralyzed.

Traffic control systems that avert traffic jams and collisions for road, rail, and air depend upon electronic systems, that the EMP Commission discovered are especially vulnerable to EMP.

Communications is a critical infrastructure because modern economies and the cohesion and operation of modern societies depend to a degree unprecedented in history on the rapid movement of information—accomplished today mostly by electronic means. Telephones, cell phones, personal computers, television, and radio are all directly vulnerable to EMP, and cannot operate without electricity. Satellites that operate at Low-Earth-Orbit (LEO) for communications, weather, scientific, and military purposes are vulnerable to EMP and to collateral effects from an EMP attack. Within weeks of an EMP event, the LEO satellites, which comprise most satellites, would probably be inoperable.

Banking and finance are the critical infrastructure that sustain modern economies. Whether it is the stock market, the financial records of a multinational corporation, or the ATM card of an individual—financial transactions and record keeping all depend now at the macro- and micro-level upon computers and electronic automated systems. Many of these are directly vulnerable to EMP, and none can operate without electricity. The EMP Commission found that an EMP event could transform the modern electronic economy into a feudal economy based on barter.

Food has always been vital to every person and every civilization. The critical infrastructure for producing, delivering, and storing food depends upon a complex web of technology, including machines for planting and harvesting and packaging, refrigerated vehicles for long-haul transportation, and temperature-controlled warehouses. Modern technology enables over 98 percent of the U.S. National population to be fed by less than 2 percent of the population. Huge regional warehouses that resupply supermarkets constitute the National food reserves, enough food to feed the Nation for 30–60 days at normal consumption rates, the warehoused food preserved by refrigeration and temperature control systems that typically have enough emergency electrical power (diesel or gas generators) to last only about an average of 3 days. Experience with storm-induced blackouts proves that when these big regional food warehouses lose electrical power, most of the food supply will rapidly spoil. Farmers, less than 2 percent of the population as noted above, cannot feed 310 million Americans if deprived of the means that currently makes possible this technological miracle.

Water too has always been a basic necessity to every person and civilization, even more crucial than food. The critical infrastructure for purifying and delivering potable water, and for disposing of and treating waste water, is a vast networked machine powered by electricity that uses electrical pumps, screens, filters, paddles, and sprayers to purify and deliver drinkable water, and to remove and treat waste water. Much of the machinery in the water infrastructure is directly vulnerable to EMP. The system cannot operate without vast amounts of electricity supplied by the power grid. A natural or nuclear EMP event would immediately deprive most of the U.S. National population of running water. Many natural sources of water—lakes, streams, and rivers—would be dangerously polluted by toxic wastes from sewage, industry, and hospitals that would backflow from or bypass wastewater treatment plants, that could no longer intake and treat pollutants without electric power. Many natural water sources that would normally be safe to drink, after an EMP event, would be polluted with human wastes including feces, industrial wastes including arsenic and heavy metals, and hospital wastes including pathogens.

Emergency services such as police, fire, and hospitals are the critical infrastructure that upholds the most basic functions of government and society—preserving law and order, protecting property and life. Experience from protracted storm-induced blackouts has shown, for example in the aftermath of Hurricanes Andrew and Katrina, that when the lights go out and communications systems fail and there is no gas for squad cars, fire trucks, and ambulances, the worst elements of society and the worst human instincts rapidly takeover. The EMP Commission found that, given our current state of unpreparedness, a natural or nuclear EMP event could create anarchic conditions that would profoundly challenge the existence of social order.

MICHAEL J. FRANKEL, Senior Scientist, Penn State University, Applied Research Laboratory  

Another important analytic insight provided by the Commission was its understanding and raising the alarm for the prospect of simultaneous failures of the system. All engineers design their systems against single-point failure.

Nobody designs against multiple failures. Here and there you may find some engineers who design against two simultaneous failures. But these failures can be affected not just by EMP. They could be affected by cyber. The important thing is that if there are simultaneous failures over large areas, the analysis of the Commission was things are very likely to fail, and restoration will take a very long time.

While not often considered in tandem, it is more correct to consider EMP vulnerabilities as one end of a continuous spectrum of cyber threats to our electronic-based infrastructures. They share both an overlap in the effects produced—the failure of electronic systems to perform their function and possibly incurring actual physical damage—as well as their mode of inflicting damage. They both reach out through the connecting electronic distribution systems, and impress unwanted voltages and currents on the connecting wires. In the usual cyber case, those unwanted currents contain information—usually in the form of malicious code—that instructs the system to perform actions unwanted and unanticipated by its owner. In the EMP case, the impressed signal does not contain coded information. It is merely a dump of random noise which may flip bit states, or damage components, and also ensures the system will not behave in the way the owner expects.

This electronic noise dump may thus be thought of as a ‘‘stupid cyber’’. When addressing the vulnerability of our infrastructures to the cyber threat, it is important that we not neglect the EMP end of the cyber threat spectrum. And there is another important overlap with the cyber threat. With the grid on the cusp of technological change in the evolution to the ‘‘smart grid’’, the proliferation of sensors and controls which will manage the new grid architecture must be protected against cyber at the same time they must be protected against EMP. Cyber and EMP threats have the unique capability to precipitate highly multiple failures of these many new control systems over a widely distributed geographical area, and such simultaneous failures, as previously discussed, are likely to signal a wider and more long-lasting catastrophe.

Another important legacy of the EMP Commission was to first highlight the danger to our electric grid due to solar storms, which may impress large—and effectively DC—currents on the long runs of conducting cable that make up the distribution system. While this phenomenon has long been known, and protected against, by engineering practices in the power industry, the extreme 100-year storm first analyzed by the Commission is now widely recognized to represent a major danger to our National electrical system for which adequate protective measures have not been taken and whose consequences—the likely collapse of much of the National grid, possibly for a greatly extended period, may rightly be termed catastrophic. At this point, the only scientific controversy attending the likelihood of our system being subject to a so-called super solar storm, is related to the time-constant. But these events have already occurred within the last century or so, they will occur again. We should be ready.

The final report of EMP Commission contained 75 recommendations to improve the survivability, operability, resilience, and recovery of all the critical infrastructures, and in particular of the most key of all, the electrical grid. Most of these recommendations were pointed towards the Department of Homeland Security. While there have been some conversations, it has been hard to detect much of an active resonance at all issuing from the Department. They have not, as far as I know, even designated EMP as a one of their 10 of 15 disaster scenarios for advanced planning circumstances. And this at a time when they do include a low-altitude nuclear disaster—certainly disastrous but not one that would produce wide-ranging EMP.

CHRIS BECK, VP, POLICY & STRATEGIC INITIATIVES, the ELECTRIC INFRASTRUCTURE SECURITY COUNCIL

For severe space weather, the most recent events occurred roughly 90 and 150 years ago, but the timing of the next such occurrence, as with all extreme natural disasters, is unknown.

Mr. PERRY. If we do harden and protect the grid, but this affects potentially all electric and electronic devices, so even though we harden the grid and power stations and can produce power and so on and so forth, will the systems in individual homes and businesses, like refrigerators and heating and cooling systems, will they be affected to the point where they will all need to be replaced, or even while we have power to our homes, none of the lights will come on and so on so forth?

Mr. PRY. It depends on the scenario. If you are talking about a geomagnetic storm, it puts at the wavelength of that, which we call E3, or magnetohydrodynamic EMP is so long that it needs to couple into long lines, like power lines, railroad tracks. It won’t couple into automobiles, refrigerators, personal computers, and things of that sort. So under that scenario, yes, if you basically keep the electric grid on, you will be able to recover the rest of the society pretty promptly. In the nuclear case of a nuclear EMP, it has an electromagnetic shock wave that we call E1. This can couple into personal computers, automobiles, and the like, and so you will have deeper societal damage; but then, again, it depends on the kind of weapon used. If it is a primitive, first-generation nuclear weapon, you know, it is not likely to do that across the whole country. It would be more limited to a several-State-size region. If it is the worst-case kind of a nuclear weapon, like a super EMP weapon, which is what we think Russia, China, and probably North Korea have, you know, then you are talking about a scenario where you are having massive, deep damage to personal computers, and refrigerators, and lights and the rest. But if you don’t have the bulk power system surviving, there is no hope of recovery under those circumstances. Under that worst-case scenario, what you are doing is you are mitigating a catastrophe and turning it into a manageable disaster, a situation where you won’t have massive loss of life, hopefully.

Mr. PERRY. How would you rate the likelihood that the United States will face an EMP event from either a high-altitude electromagnetic pulse, a HEMP, or a massive solar storm?

Mr. FRANKEL. I will take that one. You guys can as well. I think that the likelihood that the United States will face at some point a so-called massive solar storm, and thus our entire system will be under the footprint, if you will, of a massive solar storm, is about 100 percent. It will happen. The uncertainty here, I believe, is the time constant. It could happen next year, it could be 100 years, but probably not 1,000 years. The probability that we will be faced with a nuclear HEMP I would say is unknown. I don’t call it high. I don’t call it low. I would say it is an unknown probability.

Ms. CLARKE. I just wanted to clarify for the record from Dr. Pry and Dr. Frankel. I see that both of you served as staff on the EMP Commission in 2004 or thereabouts, but I am trying to get a sense of what organizations you are representing today, and how can we learn more about those organizations?

Mr. FRANKEL. I am representing only my status as a senior scientist at the Penn State University.

Mr. PRY. We both served on the Congressional EMP Commission through its life, from 2001 to 2008. I am currently the executive director of the Task Force on National and Homeland Security, which was an effort to continue the EMP Commission, because the Commissioners, including the chairman, believed it was terminated prematurely before its work was completed. So this task force is an attempt to continue the EMP Commission in some way. Dr. Graham, for example, who is the chairman of that Commission, is the chairman of my task force, and I am here today representing the task force.

Mr. PERRY. Dr. Pry. You mentioned in your testimony a satellite passing over the Washington-New York corridor. I would like you to describe the importance or the potential importance of that, and in that context also please describe the National electric grid interconnection, what regions of the country are most vulnerable to grid collapse as a result of EMP attack.

Mr. PRY. Well, the KSM–3 satellite was orbited by North Korea in December 2012, about 3 months before we had our gravest nuclear crisis with North Korea when in February 2012 they ignited— they conducted their third nuclear test, violating international law, and when the United States international community moved to impose additional sanctions to punish North Korea for this, they started threatening to make nuclear strikes against the United States. There was a nuclear crisis so grave during the period from February 12 through the end of April that, you know, the President was sending B–2 bombers over the demilitarized zone to do practice bombing runs and demonstration exercises; strengthened the National missile defense, including moving a THAAD interceptor to Guam just in case Kim Jong-Un tried to deliver on these nuclear threats. In the midst of this crisis, the KSM–3, which was still orbiting, its orbit followed the exact orbit that the Soviets had come up with in the Cold War for a secret nuclear weapon to conduct a surprise nuclear attack called a fractional orbital bombardment system. It is basically a space launch vehicle that uses a nuclear weapon disguised as a satellite, and instead of launching over the North Pole and following a normal ballistic trajectory toward the United States, it launches south and crosses over the south polar region and comes up from—approaches from the south because we don’t have any ballistic missile early warning radars in that location or interceptors, and we are blind to the south and defenseless, and so you would be able to detonate a warhead and do an EMP attack and catch us by surprise. That was the plan during the Cold War, and the trajectory and the altitude of this satellite were precisely the same as the kinds of fobs that the Soviets had used. Between April 8 and the 16th of April, it went from the center of the United States, and on the 16th was passing over the Washington, DC/New York corridor, which is the ideal location for putting down a peak field, because if you look at where our EHV transformers are located, they are most deeply located, the largest numbers of them, the map is just almost a solid block of red because it is so densely concentrated, the EHV transformers in that area. If you wanted to take down the eastern grid, that would be the best place to place a peak EMP field. Taking out the eastern grid is really all you have to do because 75 percent of our power is generated in the eastern grid. The western grid is the next most important, and the Texas grid is the third most important. But that was the KSM–3 threat and its relationship to the grid system.

Mr. PERRY. Speaking of those, the transformers, it has been noted that the Extremely High-Voltage, the EHV transformers which are indispensable to the electric grid, are expensive and hard to replace. If you know, what is the lead time for manufacturing new or replacement transformers, and given that there are limited manufacturers in the United States, where are the suppliers located?

Mr. PRY. There are two places that manufacture these for export, South Korea and Germany, and we are still dependent on them.

There is a DHS briefing going around that says we have limited capabilities to manufacture EHV transformers in the United States. In fact, we currently don’t really have demonstrated capability to manufacture these transformers in the United States yet. They have to be made by hand the way they were made back in Nikola Tesla’s day, the inventor of the EHV transformer. So every one of them is custom made, every one of them has a unique role to play in the grid. They aren’t mass produced. It is not easy. There is a lot of artisanship that goes into the making of these transformers.

Brazil tried to become independent of making its own EHV transformers a decade ago, and it took them 5 years before they were able to start attempting to make their first transformers, and they didn’t perform well. So now Brazil gave up on that, and it has to import them.

So it remains to be seen if the United States can actually manufacture any of its own EHV transformers. We haven’t manufactured one and put them out in the field and seen if they last and stand up to this. It takes 18 months under normal conditions to build one of these transformers.

Ms. CLARKE. Thank you, Mr. Chairman. I just wanted to add to the DHS question that I had raised earlier that one of the observations of the Sandy event was the unintended consequence of the grid going—the electricity going out was that people forgot that fuel stations are run through—by electricity, and so we ended up having a fuel crisis at the same time. So there is sort of a collateral damage piece to this that I hope is acknowledged as we go through this discussion about what happens in areas when just in a short period of time electrical shortages occur or the grid goes out, because even if you were trying to move physical assets, if you don’t prepare for things like fuel stations that are run by electricity, you will have a massive issue.

Mr. FRANKS. We realize that if indeed we did lose our grid, in a worst-case scenario, and we are not projecting a worst-case scenario, but if it did happen, really the aftermath where society would begin to tear ourselves apart seems to be the most frightening aspect of it to me. So the cost of doing nothing is significantly high, and I think you have demonstrated that well, but could you give us a sense of how expensive it would be to harden our bulk power system enough to recover from a major event; in other words, where we keep our main components intact, and we can bring our grid back on-line? I have been told that a couple, $3 billion over 5 years might do it, and that might be less than $1 per year per ratepayer. Am I accurately expressing that?

Mr. PRY. Yes. In fact, your estimate is high compared to the Congressional EMP Commission’s estimate, which was that it would cost about $2 billion over 3 to 5 years to harden the bulk power system, and $10–20 billion over that same period, you know, would protect all of the critical infrastructures.

Mr. BECK. The U.S. electric grid is the most complicated in the world both by physical design; by the overlapping regulatory authority, 50 States, a Federal Government, 3,500 electric companies, et cetera. When we did the international study, it was pretty easy, and one of the things where lessons learned was easy was because you could look at Finland, which has one company and one regulator, right? So a much easier thing to deal with. Here it is—that does make it very difficult, and so I have to—in all honesty, and not to try to duck the question, but the answer is somewhat complicated because there are all these agencies, and there isn’t just one agency that is in charge.

Mr. FRANKEL. Yes, certainly the Department of Homeland Security, I think, has the primary responsibility, but we should also not forget the Department of Energy. They have offices of energy assurance, and they should also be playing some role. Right now I don’t discern exactly what it is, but somewhere between those two, with DHS in the primary role, I think that is where you look for leadership. I want to at least mention the Department of Defense not in a leadership role in this instance, but they are doing a lot of relevant work developing hardening techniques. Worried about their own networks and things of that sort, but they have very important technology support to contribute to that sort of thing. But in the end it is not their responsibility, and it is not their mission, and they are not going to do it. You need to look at those two Departments for leadership.

Mr. PRY. I agree with what has been said. The Department of Homeland Security, especially when you are looking at the role from the Critical Infrastructure Protection Act for planning, training, and resource allocation for emergency planners and responders—under the Department of Homeland Security, within the Department of Homeland Security, the logical regulatory authority to work most closely over the electric grid should be the U.S. Federal Energy Regulatory Commission, the U.S. FERC, and this would be addressed by the SHIELD Act that Mr. Franks is sponsoring in front of the House Energy and Commerce Committee. I think this is really like the—almost equally important with the Critical Infrastructure Protection Act in terms of its passage, because the reality and the reason we have this problem is because the electric power industry exists in a 19th Century regulatory environment. I mean, there is no Federal agency that has the kind of regulatory authority relative to the electric power industry that, for example, the Federal Aviation Administration has over the airline industry, you know. I think all Americans and even Tea Party Republicans would agree that, you know, we need an FAA so you have independent inspectors who will go out and see, you know, is there metal fatigue in the wings of this aircraft, and when that airplane can’t fly, and that if an airplane crashes, you have an FAA to inspect the crash and find out what happened so that it never happens again. We do this because hundreds of lives are at stake, and we need to maintain the public safety. That is why we have an FAA. But the U.S. FERC doesn’t have that power. It can ask the NERC, which represents the industry, and previously was a trade association, by the way, and unofficially is a lobby for the electric power industry, and NERC is the one that is in charge. They regulate themselves through the NERC. The FERC can ask them to come up with a plan.

The great 2003 Northeast blackout was caused by a falling tree branch that caused cascading—it took them 10 years for NERC to come up with a plan, vegetation management plan. So not just—you know, cyber 5 years; they were asked for a plan some 5 years before they started moving on that. So U.S. FERC, I say, would be the tip of the spear for dealing with the electric power industry.

Mr. Pry. An electromagnetic pulse (EMP) is a super-energetic radio wave that can destroy, damage, or cause the malfunction of electronic systems by overloading their circuits. EMP is harmless to people biologically, passing through their bodies without injury, like a radio wave. But by damaging electronic systems that make modern society possible, that enable computers to function and airliners to fly for example, EMP can cause mass destruction of property and life.

It would take about 3.5 years to harden the grid.

Thousands of emergency planners and first responders at the Federal, State, and local level want to protect our Nation and their States and communities from the EMP threat, but they are seriously hindered and even prohibited from doing so because the EMP threat is not among the 15 canonical National planning scenarios utilized by the Department of Homeland Security.

House 112-115. September 12, 2012. The EMP threat: Examining the consequences. House of Representatives. 64 pages.

Mr. LUNGREN. An EMP is a burst of electromagnetic radiation typically generated by a high-altitude nuclear explosion or a non-nuclear device. Nuclear weapon EMPs are most effective when detonated high in the altitude above the intended target. Depending on the yield of the weapon and the height of the explosion, nuclear EMPs can destroy large portions of the U.S. power and communications infrastructure

Geomagnetic radiation generated by a naturally occurring solar storm can also damage the same infrastructure. An EMP attack would destroy the electronics and digital circuitry in the area of impact, thereby denying electric power to our homes, businesses, and military.

Our country is dependent on electricity to power our health, financial, transportation, and business systems. If our power system was ever lost for an extended period, according to Dr. William Graham, the chairman of the EMP Commission, it would have catastrophic and lethal consequences for our citizens and the economy. It would also potentially degrade our military defenses.

America’s digital dependence grows every year and we rejoice in that. But the fact of the matter is that along with that dependence comes our EMP vulnerability. What I mean by that is America has gotten used to the digital world. It powers and is implicated in so much of our everyday life, that if it were in fact attacked in a serious way, it would result in some cases, unforeseen circumstances. What I mean by that is most people don’t think about them.

Computer simulations carried out in March 2010 by Oak Ridge National Laboratory demonstrated that an electromagnetic pulse from a nuclear device detonated at high altitude or a powerful solar storm could destroy or permanently damage major sections of our National power grid. According to this Oak Ridge study, the collapse of our power system could impact 130 million Americans, could require 4 to 10 years to fully recover, and could impose economic costs between $1 trillion and $2 trillion.

The National electric grid has almost no backup capability in the event of a power collapse from electromagnetic pulses. According to FERC testimony presented this morning, existing bulk power reliability standards don’t even address EMP vulnerabilities. In addition, with most of the Nation’s power system under private ownership, who view an EMP event as unlikely or so we are told, there is been little preparation for a long-term power collapse. Although the impact of an EMP event has been examined, studied, and debated, I am fearful that little progress seems to have been made in mitigating the EMP threat. Although the United States has conducted numerous exercises to test our readiness against natural events such as hurricanes, we have never conducted an exercise to help us prepare for the severe consequences of a National power outage from an EMP event. I am informed that the Defense Department takes this seriously and, therefore, has taken steps to protect many of their critical infrastructure from an EMP event. Either they are wasting a lot of money because it is not a serious event—we should stop them from doing it and save us billions of dollars—or it is a serious threat to our National defense capabilities, and we ought to look in the same way in terms of our domestic capabilities. That is, what sustains our standard of living, but in some ways, a way of life for the American public.

I don’t want to be an alarmist on this. I want to be a realist on this. That is why we have asked a number of people to testify here today. My thought is that the more information, the greater awareness the American people have and that we as leaders have, the better we will be prepared to deal with this, as long as we understand what the true consequences are.

With most of the Nation’s power system under private ownership, who view an EMP event as unlikely, there has been little preparation for a long-term power collapse.

NICKOLAUS E. LEGGETT, N3NL, ANALYST, AMATEUR RADIO OPERATOR, INVENTOR, U.S. CITIZEN

Electromagnetic pulse (EMP) is a serious threat to the continued existence of the United States as a major military, economic, and social power. Indeed, EMP is a major threat to the continued existence of the United States in any form.

High-altitude Electromagnetic Pulse (HEMP) is the generation of a very intense pulse of radio waves using a nuclear weapon or device exploded in space near the Earth. The radiation from the nuclear bomb excites and agitates the Earth’s ionosphere which generates a large zone of intense radio waves that can disable electronic equipment and communications equipment throughout the Nation.

A HEMP attack consisting of a single high-yield nuclear weapon exploded a couple of hundred miles above the United States would disable electronics and communications through most of the Nation. Most of our Nation’s electronic infrastructure uses solid-state electronics and microprocessors that are quite vulnerable to electromagnetic pulse. The failure of much of our electronics infrastructure would cause serious problems in supplying food, water, electric power, and communications to our population. In addition, the functions of business, government, and law enforcement would be greatly impaired. Panic, rioting, and the failure of law and order would probably occur.

I have devoted many years of my life to bringing the EMP threat to the attention of the Federal Communications Commission (FCC). Donald J. Schellhardt and I have submitted two formal petitions to the FCC calling for a Notice of Inquiry (NOI) and a Notice of Proposed Rule Making (NPRM) on EMP. Refer to Note 4. In addition, we have filed other formal comments with the Commission on this subject. The FCC has declined to take any positive action on EMP. I am rather puzzled that the FCC refuses to act to protect our communications infrastructure from EMP. The subject is certainly interesting and it would be desirable to avoid the great damage that would result from any EMP attack. There is ample evidence that EMP is a real and serious threat to the Nation. Certainly, if an EMP attack did occur, the Nation would not be friendly towards the decision makers who refused to protect against EMP attacks and their consequences.

HOSTILE NATIONS. We can all easily imagine several nations that would be quite happy if the United States were to collapse in response to an EMP attack. In their view, EMP would be a rather convenient method for deleting a major competitor. While launching a missile with a warhead from a ship is not an easy task, it is certainly easier than other methods of eliminating the United States. Also, the structure of the United States may become so shattered by an attack that other nations could actually colonize parts of the former United States.

AMATEUR RADIO can perform local and long-distance communications during and after these chaotic events. Congress should establish legislation that would allow amateur radio operators to establish minimum-sized amateur radio antennas despite opposition of homeowner associations, condominium managements, and rental landlords.

Mr. LUNGREN. We have several panels of distinguished witnesses before us today. The sole witness of our first panel is Congressman Trent Franks. He represents Arizona’s second Congressional district, serves on the Armed Services Committee and the Judiciary Committee, where he currently chairs the Constitutional Law Subcommittee. In addition, Congressman Franks serves as the co-chair of the Congressional EMP Caucus, and has studied this issue for several years.

HON. TRENT FRANKS ( ARIZONA). As a Nation, we have spent billions of dollars over the years hardening our nuclear triad, our missile defense capabilities, and numerous other critical elements of our National security apparatus against the effects of electromagnetic pulse, particularly the type that might be generated by a high-altitude nuclear warhead detonation over our country by one of America’s enemies. However, our civilian grid, which the Defense Department relies upon for nearly 99 percent of its electricity needs, is completely vulnerable to the same kind of danger. This constitutes an invitation on the part of certain enemies of the United States to use the asymmetric capability of EMP against us. There is now evidence that such strategies are being considered by certain of those enemies. We recently witnessed, as you said, Mr. Chairman, the chaos that attends a prolonged power outage when the derecho storm impacted the District of Columbia and the surrounding area. Our sick and elderly suffered without air conditioning. Grocery stores were unable to keep food fresh. Gas lines grew. Thankfully, the derecho had only a regional and limited impact.

In 2004 and 2008, the EMP Commission testified before the Armed Services Committee, of which I am a member, that the U.S. society and economy are so critically dependent upon the availability of electricity that a significant collapse of our grid precipitated by a major natural or manmade EMP event could result in catastrophic civilian casualties. This conclusion is echoed by separate reports recently compiled by the DOD, DHS, DOE, NAS, along with various other agencies and independent researchers.

While there are those certainly who believe that the likelihood of terrorists or rogue nations obtaining nuclear weapons and using them in an EMP attack is remote, the recent events of the Arab Spring our intelligence apparatus did not foresee, show us that regimes can change very quickly. Iran’s increasingly obvious efforts to gain nuclear weapons should serve as a grave and urgent warning to all of us.

Catalyzed by a major solar storm, a high-altitude nuclear blast, or a non-nuclear, device-induced Intentional Electromagnetic Interference, this invisible force of ionized particles has the capability to overwhelm and destroy our present electrical power grids and electrical equipment, including electronic communication networks, radio equipment, integrated circuits, and computers. The reality of the potentially devastating effects of sufficiently intense electromagnetic pulse on the electronic systems/sources of many of our critical defense and National security components is well-established, and beyond dispute.

Automated hardware is particularly important when one considers the shortcomings of procedural safety measures alone in response to an EMP event. According to solar weather experts, there is only 20–30 minutes’ warning from the time we predict a solar storm may affect us to the time it actually does. This is simply not enough time to implement procedures that will adequately protect the grid. Furthermore, these predictions are only accurate one out of three times. This places a crushing dilemma on industry, who must decide whether or not to heed the warning with the knowledge that a wrong decision either way could result in the loss of thousands or even millions of lives and massive legal ramifications beyond expression.

Because of new understandings of how EMP interacts with the Earth’s electromagnetic field, and that it is intensified over large land mass, we now believe that if a warhead with a nuclear yield of just 100 kilotons detonated at an altitude of 400 kilometers over America’s heartland, the resulting damage to our electric grid and infrastructure would be catastrophic across most of the continental United States. Such a result would be devastating to our electricity, transportation, water and food supply, medical care, financial networks, telecommunication and broadcasting systems and our infrastructure in general. Under such a scenario, both military and productive capability would be devastated. The immediate and eventual impact, directly and indirectly, on the human population, especially in major cities, is unthinkable. It should be remembered that EMP was first considered as a military weapon during the ‘‘Cold War’’ as a means of paralyzing U.S. retaliatory forces. America’s EMP commission began their 70-page executive summary describing a one- or two-missile EMP attack as one of the few threats which look as if it could defeat the U.S. military.

Dr. William Graham, the chairman of the EMP Commission, testified before the U.S. House Armed Services Committee, and stated: ‘‘EMP is one of a small number of threats that can hold our society at risk of catastrophic consequences. ‘‘…A determined adversary can achieve an EMP attack capability without having a high level of sophistication. For example, an adversary would not have to have long-range ballistic missiles to conduct an EMP attack against the United States. Such an attack could be launched from a freighter off the U.S. coast using a short- or medium-range missile to loft a nuclear warhead to high altitude. Terrorists sponsored by a rogue state could potentially execute such an attack without revealing their identity.’’ Dr. Graham has said that a major catastrophic EMP attack on the United States could cause an estimated 70–90 percent of the our Nation’s population to become unsustainable.

It is impossible for me to even wrap my mind around that figure.

But for terrorists, this is their ultimate goal, and I believe EMP is their ultimate asymmetric weapon. In 1988, Osama bin Laden called it a religious duty for al-Qaeda to acquire nuclear weapons. U.S. Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff, has stated: ‘‘My worst nightmare is terrorists with nuclear weapons. Not only do I know they are trying to get them, but I know they will use them.’’ This is indeed the greatest danger of all. If a rogue state like Iran steps over the nuclear threshold, rogue regimes and terrorists the world over will have access to these monstrous weapons.

Mahmoud Ahmadinejad again made it clear where he stands on Israel when he declared, ‘‘[Israel] is about to die and will soon be erased from the geographical scene.’’ Jewish author, Primo Levi, was once asked what he had learned from the Holocaust. He replied, ‘‘When a man with a gun says he’s going to kill you—believe him.’’

At this moment, Iranian President Mahmoud Ahmadinejad, a man who, in the same breath, both denies the Holocaust ever occurred, and then threatens to make it happen again, is arrogantly seeking a gun with which he vows to wipe the state of Israel off the map.

He has also said: ‘‘The time for the fall of the satanic power of the United States has come and the countdown to the annihilation of the emperor of power and wealth has started.’’ He has said point-blank, ‘‘The wave of the Islamist revolution will soon reach the entire world.’’ Unfortunately, he talks like a man who knows something the rest of us don’t. It is not enough, to casually dismiss his fanatical rhetoric. When analyzing the nature of any threat, we must always seriously assess two things: A potential enemy’s intent and his corresponding capacity to carry out any such intent.

Mahmoud Ahmadinejad and his regime have stated very clearly their intent to see Israel wiped off the face of the earth and America and the West brought to their knees. Nuclear warheads could give them the capacity to effectively proceed in that endeavor.

Mr. Chairman and Members, these things should not surprise us. We are now 65 years into the nuclear age, and the ominous intersection of jihadist terrorism and nuclear proliferation has been inexorably and relentlessly rolling toward America and the free world for decades. But, when we add the dimension of asymmetric electromagnetic pulse attacks to that equation, we face a menace that may represent the gravest short-term threat to the peace and security of the human family in the world today.

Is a regime change in Pakistan possible? Will there be blowback from our involvement in Libya? What about the current crisis in Syria? Will North Korea ever supply or sell its nuclear technology or warheads to terrorists? Will Iran develop or obtain nuclear weapons? Iran’s increasingly obvious efforts to gain nuclear weapons should serve as a grave and urgent warning to all of us. If terrorists or rogue states do acquire nuclear weapons, hardening our electric grid would become a desperate priority for our Nation. However, that process will take several years, while a regime change takes only weeks and a missile launch only minutes. The fact that we are now 100% vulnerable means we should start securing our electric infrastructure now. Indeed, by reducing our vulnerability we may reduce the likelihood that terrorists or rogue states would attempt such an attack.

We should always remember that 7 decades ago, another murderous ideology arose in the world. The dark shadow of the Nazi swastika fell first upon the Jewish people of Germany. And because the world did not heed the warnings of men like Winston Churchill and respond to that evil in time, it began to spread across Europe until it lit the fires of World War II’s hell on earth which saw atomic bombs fall upon cities and over 50 million people dead worldwide.

History has repeatedly shown humanity to be susceptible to malignant dangers that approach inaudibly and nestle among us with innocuous countenance until a day of sudden calamity finds us empty-handed, broken-hearted, and without excuse.

Mr. LUNGREN. Where is the failure? Is the failure with the Congress? Is the failure with the Executive branch? Is the failure with critical infrastructure owners? If this is as serious as you suggest, as some of these reports suggest, the lack of attention to it is something that bewilders me. You have been involved in a lot of issues on the Armed Services Committee and so forth, and I am trying to figure out what is it that is lacking on this issue that does not garner the attention of the American people? In other words, is there a lack of consensus about the threat? Is there a serious question about whether this is a serious issue?

Mr. FRANKS. I would only suggest to you that when the EMP Commission came to the Armed Services Committee in 2004, I had been aware of EMP. My background is engineering. I had been aware of it, but I thought it was like something that could be catastrophic, but the chances of it happening were so remote.The testimony was that five other nations were developing this as an offensive capability. Certainly, the Soviet Union had a major EMP component in their nuclear strategy. So there is a … clear consensus of the danger this represents. However, when you go over into the civilian areas, it seemed like there is a general, sort of a lackadaisical, kind of a——

Mr. LUNGREN. Let me ask you about that, because I have found most people who are involved in critical infrastructure in the private sector are serious-minded folks. They do recognize the value of their assets. In most cases, when I am dealing with them on issues, I find them to be forward-thinking and to actually try and protect those assets. They articulate that in a way so that they can justify certain capital investments to their shareholders or their ratepayers. Well, let me ask you this: Do you find the attention to the protection of their assets that you believe to be necessary, and if not, why as the owners and protectors of those assets, is this not taken more seriously?

Mr. FRANKS. I think that is a good question. It has been something that has bewildered me to a degree. It seemed just a few years ago, as this became more well-known that there was a more serious—or at least a more recognizable response. It seemed like in the last year, there has been sort of a pushback in parts of industry. My concern is if they have credible, scientific bases for being unconcerned or not addressing it as vigorously as some of us think that it should be, then I would adjure them to bring that testimony and that evidence to the rest of us. Because I can suggest to you that I haven’t seen it. It may be that there is some concern on the part of major manufacturers of these large components, transformers and others, that are somewhat out of professional pride. That they either don’t want to recognize the danger or somehow they feel like that there would be some requirement of reengineering of some of these major components if they did. But I would suggest that the potential liability here is off the charts. The fix here—and this would probably be one of the more important points to point out—the fix here is fairly simple, at least in terms of protecting our electric-producing grid—not all the elements that are connected to it. That is a huge issue. But at least to be able to keep the lights on—electricity coming—that is a fairly easy fix.

The primary thing that the Shield Act addresses is to make sure that our major transformers are 750 KV corridor are not destroyed, which means that we would be in a catastrophic civilizational challenge where we wouldn’t have electricity and wouldn’t be able to perhaps restore it for months or even years. That is the worst-case scenario. The Shield is designed to prevent that. Some of these ancillary damages on cell phones, radios, things like that, it is difficult to mitigate against that in a short-term fix. We have to harden as we go. But my contention is if we take those components as we rebuild them and replace them and harden them against EMP, which we can do that. It adds about 10 percent to the cost of doing that. Then we can eventually get past this vulnerability. But the main big vulnerability that we have right now is the potential damage to our major transformers that could be caused by either a high-altitude electromagnetic pulse or GMD.

Finally, I would just say that the worst-case scenario is so bad that rather than preparing for it, we must prevent it from ever occurring.

Joseph McClelland, Director, Office of Electric Reliability, Federal Energy Regulatory Commission (FERC).

Faced with a National security threat to reliability, there may be a need to act decisively in hours or days, rather than weeks, months, or years. That would not be feasible even under the expedited process. In the meantime, the bulk power system would be left vulnerable to a known National security threat. Moreover, existing procedures, including the expedited action procedure, could widely publicize both the vulnerability and the proposed solution, thus increasing the risk of hostile actions before the appropriate solutions are implemented.

In addition, a reliability standard submitted to the Commission by NERC may not be sufficient to address the identified vulnerability or threat. Since FERC may not directly modify a proposed reliability standard under section 215 and must either approve or remand it, FERC would have the choice of approving an inadequate standard and directing changes, which reinitiates a process that can take years, or rejecting the standard altogether. Under either approach, the bulk power system would remain vulnerable for a prolonged period.

Finally, the open and inclusive process required for standards development is not consistent with the need to protect security-sensitive information. For instance, a formal request for a new standard would normally detail the need for the standard as well as the proposed mitigation to address the issue, and the NERC-approved version of the standard would be filed with the Commission for review. This public information could help potential adversaries in planning attacks.

Regarding man-made events, EMP can also be generated by weapons. Equipment and plans are readily available that have the capability to generate high-energy bursts, termed ‘‘E1’’, that can damage or destroy electronics such as those found in control and communication systems on the power grid. These devices can be portable and effective, facilitating simultaneous coordinated attacks, and can be reused, allowing use against multiple targets. The most comprehensive man-made EMP threat is from a high-altitude nuclear explosion. It would affect an area defined by the ‘‘line-of-sight’’ from the point of detonation. The higher the detonation the larger the area affected, and the more powerful the explosion the stronger the EMP emitted. The first component of the resulting pulse E1 occurs within a fraction of a second and can destroy control and communication electronics. The second component is termed ‘‘E2’’ and is similar to lightning, which is well-known and mitigated by industry. Toward the end of an EMP event, the third element, E3, occurs. This causes the same effect as solar magnetic disturbances. It can damage or destroy power transformers connected to long transmission lines and cause voltage problems and instability on the electric grid, which can lead to wide-area blackouts. It is important to note that effective mitigation against solar magnetic disturbances and non-nuclear EMP weaponry provides effective mitigation against a high-altitude nuclear explosion.

In 2001, Congress established a commission to assess the threat from EMP, with particular attention to be paid to the nature and magnitude of high-altitude EMP threats to the United States; vulnerabilities of U.S. military and civilian infrastructure to such attack; capabilities to recover from an attack; and the feasibility and cost of protecting military and civilian infrastructure, including energy infrastructure.

In 2004, the EMP commission issued a report describing the nature of EMP attacks, vulnerabilities to EMP attacks, and strategies to respond to an attack. A second report was produced in 2008 that further investigated vulnerabilities of the Nation’s infrastructure to EMP. The reports concluded that both electrical equipment and control systems can be damaged by EMP. The reports also pointed out how the interdependencies among the various infrastructures could become vulnerabilities after an EMP. In particular, they point to the electrical infrastructure’s need of the communication and natural gas infrastructures.

In 1859, a major solar storm occurred, causing auroral displays and significant shifts of the Earth’s magnetic fields. As a result, telegraphs were rendered useless and several telegraph stations burned down. The impacts of that storm were muted because semiconductor technology did not exist at the time. Were the storm to happen today, according to an article in Scientific American, it could ‘‘severely damage satellites, disable radio communications, and cause continent-wide electrical black-outs that would require weeks or longer to recover from.’’3 Although storms of this magnitude occur rarely, storms and flares of lesser intensity occur more frequently. Storms of about half the intensity of the 1859 storm occur every 50 years or so according to the authors of the Scientific American article, and the last such storm occurred in November 1960, leading to world-wide geomagnetic disturbances and radio outages. The power grid is particularly vulnerable to solar storms, as transformers are electrically grounded to the Earth and susceptible to damage from geo-magnetically-induced currents. The damage or destruction of numerous transformers across the country would result in reduced grid functionality and even prolonged power outages. In March 2010, Oak Ridge National Laboratory (Oak Ridge) and its subcontractor Metatech released a study that explored the vulnerability of the electric grid to EMP-related events. This study was a joint effort contracted by FERC staff, the Department of Energy, and the Department of Homeland Security and expanded on the information developed in other initiatives, including the EMP commission reports. The series of reports provided detailed technical background and outlined which sections of the power grid are most vulnerable, what equipment would be affected, and what damage could result. Protection concepts for each threat and additional methods for remediation were also included along with suggestions for mitigation. The results of the study support the general conclusion that EMP events pose substantial risk to equipment and operation of the Nation’s power grid and under extreme conditions could result in major long-term electrical outages. In fact, solar magnetic disturbances are inevitable with only the timing and magnitude subject to variability. The study assessed the 1921 solar storm, which has been termed a 1-in-100-year event, and applied it to today’s power grid. The study concluded that such a storm could damage or destroy up to 300 bulk power system transformers, interrupting service to 130 million people for a period of years.

In February 2012, NERC released its Interim Report: Effects of Geomagnetic Disturbances on the Bulk Power System. In it, NERC concluded that the most likely worst-case system impact from a severe geomagnetic disturbance is voltage instability and voltage collapse with limited equipment damage.

The existing reliability standards do not address EMP vulnerabilities. Protecting the electric generation, transmission, and distribution systems from severe damage due to an EMP-related event would involve vulnerability assessments at every level of electric infrastructure.

BRANDON WALES, DIRECTOR, HOMELAND INFRASTRUCTURE THREAT AND RISK ANALYSIS CONTER, DEPARTMENT OF HOMELAND SECURITY

The Commission to Assess the Threat to the United States from Electromagnetic Pulse (EMP) Attack recommended in its final report that DHS ‘‘play a leading role in spreading knowledge of the nature of prudent mitigation preparations for EMP attack to mitigate its consequences.’’

EMPs can be high-frequency, similar to a flash of lightning or a spark of static electricity, or low- frequency, similar to an aurora-induced phenomenon. An EMP can spike in less than a nanosecond or can continue longer than 24 hours, depending on its source. The consequences of an EMP range from permanent physical damage to temporary system disruptions and can result in fires, electric shocks to people and equipment, and critical service outages. There are four general classes of EMP.

High-altitude EMP (HEMP) results from a nuclear detonation typically occurring 15 or more miles above the Earth’s surface. The extent of HEMP effects depends on several factors, including the altitude of the detonation, the weapon yield and design, and the electromagnetic shielding, or ‘‘hardening,’’ of assets. One high-altitude burst could blanket the entire continental United States and could cause widespread power outages and communications disruptions and possible damage to the electricity grid for weeks or longer.4 HEMP threat vectors can originate from a missile, such as a sea-launched ballistic missile; a satellite asset; or a relatively low- cost balloon-borne vehicle. A concern is the growing number of nation-states that in the past have sponsored terrorism and are now developing capabilities that could be used in a HEMP attack.

Source Region EMP (SREMP) is a burst of energy similar to HEMP but differs in that it is created when a nuclear weapon detonates at lower altitudes within the atmosphere. SREMP can occur when a detonation occurs on or near the ground, as would likely be the case of a terrorist nuclear device attack. A SREMP’s electromagnetic field is much more limited in range than that from HEMP; it would only affect a delimited geographic area. SREMP can induce very high currents on power cables or metallic communications lines near the fireball, and it can send extreme spikes of energy great distances from the blast zone along these metal lines, potentially causing fires where these lines meet other infrastructures. In addition, the SREMP travels through the air and can damage or disrupt equipment connected to Ethernet cables, telephone lines, and power cords out to 70 miles or more. Electronic systems not connected to power cords or communications lines, such as a cell phone, are generally resistant to SREMP but become useless if the infrastructure that supports them is non-functional. While SREMP is not the primary reason a terrorist would detonate a nuclear weapon, it is important to note that all ground-based detonations create SREMP of sufficient magnitude to cause infrastructure disruptions, including an improvised nuclear device, a crude nuclear device that could be built from the components of a stolen weapon or from using nuclear materials. Given the possible impacts of SREMP, such as secondary fires and the disruptions of power, communications, and other critical infrastructures, it is an important consideration in our Department’s planning to mitigate and respond to this type of attack.

Since the 1980s, our power grid control systems and information infrastructures have been growing in their reliance on the Ethernet and computers, which are much more vulnerable to E1 EMP than previous control and communications systems designs. Likewise, the power grid today is much more vulnerable to (E3 EMP) and solar storms than the grid of the 1970s and 80s due to the increasing network size and evolution to higher operating voltages.

Unlike HEMP and SREMP, which primarily disrupt Earth-based infrastructures, System Generated EMP (SGEMP) is a threat to space-based assets, such as satellites or a space station. SGEMPs originate from a nuclear weapon detonation above the atmosphere that sends out damaging X-rays that strike space systems. Both SGEMP and HEMP are similar, in that they both originate from a high-altitude burst. The Department’s chief concern with SGEMP and other related high- altitude nuclear effects is that satellite or other space systems that support critical communications and navigation services, as well as essential intelligence functions, can be immediately disrupted. SGEMP and other related effects could also harm systems supporting any astronaut in space. The fourth type of EMP is Non-Nuclear EMP, or NNEP. This type of EMP can be created by Radio Frequency Weapons (RFWs), devices designed to produce sufficient electromagnetic energy to burn out or disrupt electronic components, systems, and networks. RFWs can either be electrically-driven, where they create narrowband or wideband microwaves, or they can be explosively driven, where an explosive is used to compress a magnetic field to generate the pulse. Multiple nations have used RFWs since the 1960s to disable or jam security, communications, and navigation systems; induce fires; and disrupt financial infrastructures. Devices that can be used as RFWs have unintentionally caused aircraft crashes and near crashes, pipeline explosions, gas spills, computer damage, vehicle malfunctions, weapons explosions, and public water system malfunctions.5 The Department believes that much of the mitigation and planning we are doing for other types of EMP will help reduce our threat to NNEP.

 

SOLAR WEATHER is created as a result of massive explosions on the sun that may shoot radiation towards the Earth. These effects can reach the Earth in as little as 8 minutes with Solar Flare X-rays or over 14 hours later with a Coronal Mass Ejection (CME) plasma hurricane. An extreme CME is the Department’s biggest Solar Weather concern. It could create low-frequency EMP similar to a megaton-class nuclear HEMP detonation over the United States, which could disrupt or damage the power grid, undersea cables, and other critical infrastructures. The United States experiences many solar weather events each year, but major storms that could significantly impact today’s infrastructures are not common but have previously occurred in 1921 and 1859 and possibly in several other years prior to the establishment of the modern power grid. The U.S. Department of Energy and utility owners and

In the last 200 years, only the 1859 and 1921 solar superstorms are believed by experts to have exceeded the 4,000 nanoTesla/minute level over the United States. If one of these storms were to occur today, many experts believe they would likely damage key elements of the power grid and could cause very long-term power outages over much of the United States.

POTENTIAL IMPACTS TO CRITICAL INFRASTRUCTURE. Overall, EMP in its various forms can cause widespread disruption and serious damage to electronic devices and networks, including those upon which many critical infrastructures rely, such as communication systems, information technology equipment, and supervisory control and data acquisition (SCADA) modules. SCADA modules are used in infrastructure such as electric grids, water supplies, and pipelines. The disruptions to SCADA systems that could result from EMP range from SCADA control errors to actual SCADA equipment destruction. Secondary effects of EMP may harm people through induced fires, electric shocks, and disruptions of transportation and critical support systems, such as those at hospitals or sites like nuclear power plants and chemical facilities. EMP places all critical infrastructure sectors at risk. Those sectors that rely heavily on communications technology, information technology, the electric grid, or that use a SCADA system are particularly vulnerable. The complex interconnectivity among critical infrastructure sectors means that EMP incidents that affect a single sector will likely affect other sectors—potentially resulting in cascading failures. The interdependent nature of all 18 critical infrastructure sectors complicates the impact of the event and recovery from it.

MICHAEL A. AIMONE, DIRECTOR, BUSINESS ENTERPRISE INTEGRATION OFFICE OF THE DEPUTY UNDER SECRETARY OF DEFENSE FOR INSTALLATIONS AND ENVIRONMENT, OFFICE OF UNDER SECRETARY OF DEFENSE FOR ACQUISITION, TECHNOLOGY, AND LOGISTICS, DEPARTMENT OF DEFENSE

I would also say that some of the information associated with the likelihood of an EMP being used would have to be done in a closed hearing.

REFERENCES (112-115, 2nd post)

The text of the Congressional Commission to Assess the Threat to the United States from Electromagnetic Pulse (EMP) Attack is available at the web site: www.empcommission.org.

This document confirms the serious impact of an EMP attack on the infrastructure of the United States.

Severe Space Weather Events—Understanding Societal and Economic Impacts— A Workshop Report, National Academy of Sciences, National Academies Press, Publication Year 2008, PAPERBACK, ISBN–10:0–309–12769–6, ISBN–13:978–0–309– 12769–1. This document can be accessed on-line at the URL: http://www.nap.edu/catalog.php?recordlid=12507.

Robert Schroeder, ‘‘Electromagnetic Pulse and Its Implications for EmComm’’, QST magazine, November 2009, pages 38 through 41. [The term EmComm refers to emergency communication.]

Petitions to the Federal Communications Commission by Donald J. Schellhardt and Nickolaus E. Leggett: Docket RM–5528, Request to Consider Requirements for Shielding and Bypassing Civilian Communications Systems from Electromagnetic Pulse (EMP) Effects. Docket RM–10330, Amendment of the Commission’s Rules to Shield Electronics Equipment Against Acts of War or Terrorism Involving Hostile Use of Electromagnetic Pulse (EMP).

Daniel N. Baker and James L. Green, ‘‘The Perfect Solar Superstorm’’, Sky & Telescope, February 2011, Vol. 121 No. 2, Pages 28–34.

Publications Dealing with the Protection of Civil Equipment and Systems from the Effects of HEMP and HPEM—Issued by the International Electrotechnical Commission (IEC) SC 77C.

Mark Clayton, ‘‘Is US Ready for a ‘Solar Tsunami’? ‘‘The Christian Science Monitor, June 27, 2011, Page 20.

H.R. 668, Secure High-voltage Infrastructure for Electricity from Lethal Damage Act (SHIELD Act). This bill was introduced on February 11, 2011. This bill addresses the subjects of solar geomagnetic storms and electromagnetic pulse (EMP) impacting the electric power industry.

‘‘Report of the Commission to Assess the Threat to the United States from Electromagnetic Pulse (EMP) Attack: Critical National Infrastructures,’’ April 2008, page 181. This report presents the results of the Commission’s assessment of the effects of a high-altitude EMP attack on our critical National infrastructures and provides recommendations for their mitigation.

Graham, Dr. William R. et al., Report of the Commission to Assess the Threat to the United States from Electromagnetic Pulse (EMP) Attack (2004).

Dr. John S. Foster, Jr. et al., Report of the Commission to Assess the Threat to the United States from Electromagnetic Pulse (EMP) Attack (2008).

Odenwald, Sten F. and Green, James L., Bracing the Satellite Infrastructure for a Solar Superstorm, Scientific American Magazine (Jul. 28, 2008).

Robert L. Schweitzer, LTG (ret) USA, ‘‘Radio Frequency Weapons: The Emerging Threat and Policy Implications,’’ Eagan, McAllister Associates, October 1998; see also: Overview of Evolving and Enduring Threats to Information Systems, National Communications System, August 2012.

Related articles

Electric Grid

 

 

 

Posted in Congressional Record U.S., Electric Grid & EMP Electromagnetic Pulse, Infrastructure & Collapse, Interdependencies, U.S. Congress Energy Dependence, U.S. Congress Infrastructure, War | Tagged , , , | Comments Off on Electromagnetic pulse threat to infrastructure: U.S. House hearings 2012 & 2014

Another reason to think oil production probably peaked in 2005

Posted on January 19, 2016 by

[ In this Kurt Cobb post, Texas oilman Jeffrey brown explains why the story of oil production growth from 2005 to 2014 is probably wrong, because the increase came from lease condensate, not oil.  If this is true then Brown says that worldwide production of condensate “accounts for virtually all of the post-2005 increase in C+C [crude plus condensate] production.” This means almost all of the 4 million-barrel-per-day increase in world “oil” production from 2005 through 2014 may actually be lease condensate. And that means crude oil production proper has been nearly flat during this period.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts:  KunstlerCast 253, KunstlerCast278, Peak Prosperity]

Texas oilman Jeffrey Brown has been pointing out to everyone that the supposed oversupply of crude oil isn’t quite what it seems. Yes, there is a large overhang of excess oil in the market. But how much of that oversupply is honest-to-god oil and how much is so-called lease condensate which gets carelessly lumped in with crude oil? And, why is this important to understanding the true state of world oil supplies?

Lease condensate consists of very light hydrocarbons which condense from gaseous into liquid form when they leave the high pressure of oil reservoirs and exit through the top of an oil well. This condensate is less dense than oil and can interfere with optimal refining if too much is mixed with actual crude oil. The oil industry’s own engineers classify oil as hydrocarbons having an API gravity of less than 45–the higher the number, the lower the density and the “lighter” the substance. Lease condensate is defined as hydrocarbons having an API gravity between 45 and 70.

Refiners are already complaining that so-called “blended crudes” contain too much lease condensate, and they are seeking out better crudes straight from the wellhead. Brown has dubbed all of this the great condensate con.

Brown points out that U.S. net crude oil imports for December 2015 grew from the previous December, according to the U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy. U.S. statistics for crude oil imports include condensate, but don’t break out condensate separately. Brown believes that with America already awash in condensate, almost all of those imports must have been crude oil proper.

Brown asks, “Why would refiners continue to import large–and increasing–volumes of actual crude oil, if they didn’t have to–even as we saw a huge build in [U.S.] C+C [crude oil plus condensate] inventories?”

Part of the answer is that U.S. production of crude oil has been declining since mid-2015. But another part of the answer is that what the EIA calls crude oil is actually crude plus lease condensate. With huge new amounts of lease condensate coming from America’s condensate-rich tight oil fields–the ones tapped by hydraulic fracturing or fracking–the United States isn’t producing quite as much actual crude oil as the raw numbers would lead us to believe. This EIA chart breaking down the API gravity of U.S. crude production supports this view. Exactly how much of America’s and the world’s presumed crude oil production is actually condensate remains a mystery. The data just aren’t sufficient to separate condensate production from crude oil in most instances.

Brown explains: “My premise is that U.S. (and probably global) refiners hit in late 2014 the upper limit of the volume of condensate that they could process” and still maintain the product mix they want to produce. That would imply that condensate inventories have been building faster than crude inventories and that the condensate is looking for an outlet.

That outlet has been in blended crudes, that is heavier crude oil that is blended with condensates to make it lighter and therefore something that fits the definition of light crude. Light crude is generally easier to refine and thus more valuable.

Trouble is, the blends lack the characteristics of nonblended crudes of comparable density (that is, the same API gravity), and refiners are discovering to their chagrin that the mix of products they can get out of blended crudes isn’t what they expect.

So, now we can try to answer our questions. Brown believes that worldwide production of condensate “accounts for virtually all of the post-2005 increase in C+C [crude plus condensate] production.” What this implies is that almost all of the 4 million-barrel-per-day increase in world “oil” production from 2005 through 2014 may actually be lease condensate. And that would mean crude oil production proper has been nearly flat during this period–a conjecture supported by record and near record average daily prices for crude oil from 2011 through 2014. Only when demand softened in late 2014 did prices begin to drop.

Here it is worth mentioning that when oil companies talk about the price of oil, they are referring to the price quoted on popular futures exchanges–prices which reflect only the price of crude oil itself. The exchanges do not allow other products such as condensates to be mixed with the oil that is delivered to holders of exchange contracts. But when oil companies (and governments) talk about oil supply, they include all sorts of things that cannot be sold as oil on the world market including biofuels, refinery gains and natural gas plant liquids as well as lease condensate. Which leads to a simple rule coined by Brown: If what you’re selling cannot be sold on the world market as crude oil, then it’s not crude oil.

The glut that developed in 2015 may ultimately be tied to some increases in actual, honest-to-god crude oil production. The accepted story from 2005 through 2014 has been that crude oil production has been growing, albeit at a significantly slower rate than the previous nine-year period–15.7 percent from 1996 through 2005 versus 5.4 percent from 2005 through 2014 according to the EIA. If Brown is right, we have all been victims of the great condensate con which has lulled the world into a sense of complacency with regard to actual oil supplies–supplies he believes have been barely growing or stagnant since 2005.

“Oil traders are acting on fundamentally flawed data,” Brown told me by phone.

Brown points out that it took trillions of dollars of investment from 2005 through today just to maintain what he believes is almost flat production in oil. With oil companies slashing exploration budgets in the face of low oil prices and production declining at an estimated 4.5 and 6.7 percent per year for existing wells worldwide, a recovery in oil demand might push oil prices much higher very quickly.

That possibility is being obscured by the supposed rise in crude oil production in recent years that may just turn out to be an artifact of the great condensate con.

Posted in How Much Left, Kurt Cobb, Peak Oil | Tagged , | Comments Off on Another reason to think oil production probably peaked in 2005

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

Posted on January 16, 2016 by

when_trucks_stop_running_book_coverWhen Trucks Stop Running. Energy and the Future of Transportation.

Available at Springer, Amazon, Google Play, Barnes & Noble, Alibris

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

Book review: “When Trucks Stop Running: Energy and the Future of Transportation: Review” By Allan Stromfeldt Christensen

Trucks stop running in the news:

2021 Shortage of urea, used to make diesel anti-pollution additive AdBlue, threatens to grind Australia to a halt, transport industry warns. “Diesel trucks and the people who drive them are often described as the lifeblood of Australia — almost everything we buy in this country spends some time on the road.  A lot of the AdBlue, or the chemical Urea that goes into making it, is imported from China, and the supply has dried up.”

Alice Friedemann   www.energyskeptic.com  author of “Life After Fossil Fuels: A Reality Check on Alternative Energy”, 2021, Springer; “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer, Barriers to Making Algal Biofuels, and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Collapse Chronicles, Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

***

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.  These billions of diesel engine vehicles and equipment can last 40 years and go a million miles.

The main thesis of Vaclav Smil’s book “Prime movers of globalization: the history and impact of Diesel Engines and Gas Turbines (MIT Press)” is that diesel engines made civilization as we know it possible, far more than computers did.  Gasoline and steam engines are not capable of doing some of the heaviest work diesel engines do, are far less efficient, and have a shorter lifespan.

Since fossil fuels are finite, we can’t run trucks on liquefied coal or natural gas either. Ultimately we will have no choice but to run commercial transportation on renewable energy. Biofuels don’t come even remotely close to scaling up, so trucks would need to be electrified some day via batteries or catenary systems (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.

Related Posts: There are many other barriers to building a battery electric car or truck. They use many finite platinum group elements, precious elements, and rare earth elements.  Plus there are dozens of challenges to improving batteries that must be overcome but can’t because of the laws of physics and thermodynamics. Nor are trucks going to be running on hydrogen: The dumbest & most impossible renewable.

The electric grid will eventually fail without utility scale energy storage of at least a month of electricity to compensate for seasonal deficits (When Trucks Stop Running Chapter 17 The Electric Blues). Natural gas is the main energy storage now (and coal), and essential for balancing the sudden life and death of wind and solar power. But natural gas and coal are finite.  Yes, hydropower can also balance wind and solar, but mostly in the 10 lucky states that have 80% of it for just part of the year, and the few places that can afford multi-million-dollar batteries (though only for an hour or so).  The electric grid could crash from a weapon or solar flare electromagnetic pulse and be down for a year or more. Electric trucks are impossible. Without trucks, civilization fails. And it’s checkmate as well, because manufacturing uses over half of all fossil fuels, and depends on the high heat only fossils can provide to make cement, steel and other metals, glass, brick, ceramics, microchips and so on. Manufacturing can’t be run on electricity, hydrogen, or anything else, as explained in Chapter 9 of Life After Fossil Fuels. No transportation? No Manuracturing? Then no electricity generating contraptions like solar panels or wind turbines. Checkmate.

 

 

 

 

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

Posted on January 16, 2016 by

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.  Updated here: Hydrogen: The dumbest & most impossible renewable.

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
Intermittency
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)
Hydrogen
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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Cost overruns on roads from subsurface conditions

Posted on January 2, 2016 by

[ What follows are excerpts from the 91 page NRC document on cost overruns. As energy declines, future new roads aren’t likely to be built, and existing roads unpaved, so I didn’t excerpt much.  Alice Friedemann www.energyskeptic.com ]

NRC. 2016. NCHRP Influence of Geotechnical Investigation and Subsurface Conditions on Claims, Change Orders, and Overruns. National research council, National Academies Press.

Subsurface conditions are frequently considered to represent significant elements of technical and financial risk for highway construction projects. Unfortunately, information quantifying these risks is rare. This Synthesis documents the extent and type of claims, change orders, and cost overruns from subsurface conditions for state departments of transportation (DOTs). The report also identifies practices used by agencies to reduce such claims, change orders, and cost overruns.

Nearly 70% of responding agencies have minimum subsurface investigation requirements that are equal to or generally consistent with AASHTO specifications and guidelines. Fourteen percent of the responding agencies do not have minimum subsurface investigation requirements, 10% have requirements exceeding AASHTO specifications and guidelines, and the other responding agencies have requirements that are either materially different from AASHTO specifications and guidelines (6%) or less stringent than AASHTO specifications and guidelines (2%).

The most common causes of claims, change orders, and cost overruns resulting from subsurface conditions included: • Pile overruns; • Groundwater shallower than expected, affecting many types of construction; • Seepage problems, including those requiring dewatering, which was identified as being notably more costly than other causes; • Misclassified or mischaracterized subgrade, resulting in quantity revisions related to pavements, earthwork, and removal and replacement requirements for foundations; • Unanticipated rock excavation, especially that when encountering rock shallower than expected or encountering rock at foundation locations where it was not expected; and • Mischaracterized rock for drilled shaft construction.

The survey revealed the following quantitative information regarding the frequency and cost of claims, change orders, and cost overruns attributed to subsurface conditions: • The annual cost of change orders resulting from subsurface conditions was commonly in the millions of dollars and as much as $10 million per agency. • The total share of claims, change orders, and cost overruns attributed to subsurface conditions out of all claims, change orders, and cost overruns was 5% by number and 7% by cost. • The cost of subsurface condition change orders approaches 1% of the agencies’ total budgets for new construction. • Survey results indicated that the impact of subsurface conditions claims, change orders, and cost overruns is particularly significant on a project level. For instance, for one agency the cost of the average subsurface condition change orders alone consumed 7% of the associated project budget for one agency. The impact on some individual project budgets was likely much greater than 7% considering the variability of change orders.

Relatively modest changes to subsurface investigation practices can produce considerable reductions in claims, change orders, and cost overruns, particularly when the changes are tailored to a specific, recurring problem. For instance, Florida DOT reduced earthwork claims by requiring that plans show hard material that cannot be excavated using a backhoe with rock patterning rather than patterns associated with soil.

 

Communication and training involving a broad spectrum of agency and contractor personnel (including designers, contractors, inspectors, and field crews) appear to be a critical component to realizing the benefits of improvements to site characterization practices. Examples of such communication include agency guidelines and specifications, contract and bid documents, and regular training opportunities.

 

Improving subsurface investigation practice has clear benefits for design, even if substantial reductions in claims, change orders, and cost overruns are not achieved. • Improving the accuracy of boring location information can be effective in reducing claims, change orders, and cost overruns, especially for construction sites with significant spatial variation. • Implementing minimum standards for subsurface investigation and site characterization was reported to reduce claims, change orders, and cost overruns. After publishing its Geotechnical Design Manual, South Carolina DOT observed fewer claims associated with excavation equipment requirements and improved accuracy of plan earthwork quantities.

 

INTRODUCTION

 

Risks associated with geotechnical issues are significant for many construction projects and many if not most of these risks are directly or indirectly affected by the quantity and quality of subsurface investigations. Baynes (2010) found that the likelihood of experiencing geotechnical problems that significantly impact project costs or schedule on major infrastructure projects is between 20% and 50%. Other studies have found similar results for various sectors of the construction industry

 

GEOTECHNICAL CHANGE ORDERS AT INDIANA DEPARTMENT OF TRANSPORTATION

 

  • The average cost of geotechnical change orders was 1.3% of the estimated total construction costs. • The cost of geotechnical change orders was just over 10% of the total cost of all change orders. • Approximately one-quarter of the projects (84 of 300) included geotechnical change orders, with many of these projects including more than one geotechnical change order.

 

Prezzi et al. (2011) studied INDOT change orders associated with work done by the agency’s geotechnical office over a 5-year period beginning in 2003. The work was motivated by an agency perception that change orders “attributed to geotechnical conditions” were “excessive” and perhaps increasing; the research was designed to quantify the number and cost of geotechnical change orders and to develop guidance for reducing them. The study included three components:

 

  1. A national survey similar to that conducted for this synthesis. 2. Analysis of change order information from the ten largest contracts per year in each of INDOT’s six districts (300 contracts total). 3. Thirteen interviews with agency project engineers and external consulting engineers familiar with INDOT projects and practices.

 

Four main causes for geotechnical claims based on the interviews were summarized, although some of the causes are associated more with design issues than with investigation problems: • Failure to identify poor subgrade that was frequently attributed to inadequate site investigation, but also resulted from improper plan elevations. • Pile overruns and underruns, which occur when the as-built driven pile depths are different from those shown on plans. • Erosion control material quantity errors often associated with underestimating riprap and geotextile quantities as a result of mischaracterizing the soil drainage conditions. • Mechanically Stabilized Earth wall construction, although the changes were mostly related to no geotechnical aspects such as wall geometry conflicting with surface drainage lines.

 

Mott MacDonald and Soil Mechanics, Ltd. (1994) studied the effect of subsurface investigation on construction cost overruns by examining results from a database of 58 transportation projects in the United Kingdom. Three-quarters of the projects had cost overruns greater than 10% of the contract value. The authors reported “about half” of the overruns resulted from geotechnical causes, the most common being (1) problems from seepage and groundwater, (2) encountering materials different in classification from those anticipated, and (3) removal and replacement of additional unsuitable material. The direct geotechnical cost overruns averaged 3% of contract cost, which the authors compared with an average of 1% of contract cost spent on site investigation. Indirect claims resulting from delay and disruption were more significant, amounting to 5% of contract cost. It was noted that while most of the direct costs would have been required even with an adequate site investigation, the indirect overruns could have been avoided.

 

A similar study was undertaken by the U.S. National Committee on Tunneling Technology (USNCTT), which studied the effect of geotechnical site investigation on construction changes and claims. USNCTT described differing site condition change orders and claims as “many” and “costly” (U.S. National Committee on Tunneling Technology 1984). Indeed, Gould (1995) summarized the data from the USNCTT study as including claims that amounted to 12% of the overall construction costs. The USNCTT study included 87 major tunneling projects constructed over a 20-year period. USNCTT examined the ratio of completed cost to engineer’s estimate versus subsurface exploration quantity and cost data, which were available for 36 of the projects. The resulting plots reveal significant scatter, but USNCTT noted that engineer’s estimates become more reliable as the subsurface exploration quantity and cost increase. USNCTT recommends 1.5 linear feet of borehole per route foot of tunnel; according to the study, the cost of such an investigation is roughly equivalent to 3% of construction cost.

 

Finally, improved subsurface investigation has other benefits for infrastructure projects. Many studies have noted that improved subsurface investigation results in design efficiencies as well

 

The second most common cause of failure, noted in 15 of the 37 cases, was “lack of disclosure of risks, uncertainties, and consequences,” meaning the engineer failed to effectively advise owners or contractors about geotechnical risks that ultimately came to fruition. The most common cause of failure was “recommendation not followed by client or contractor,” which has similar albeit more obvious roots in human error. The authors’ recommendations emphasize the responsibility of management personnel to staff and train technical personnel appropriately and to “deal with the real need for intelligent disclosure of risks, uncertainties, and consequences.

 

The findings of Baynes (2010), Clayton (2001), and Moorehouse and Millet (1994) suggest that human effects are a primary cause of subsurface conditions claims, change orders, and cost overruns, likely equal in importance to the more tangible effects of geotechnical investigation and construction practices.

 

HUMAN EFFECTS ON SUBSURFACE CONDITIONS CLAIMS, CHANGE ORDERS, AND COST OVERRUNS EFFECT OF CONTRACTING PRACTICES ON SUBSURFACE CONDITIONS CLAIMS, CHANGE ORDERS, AND COST OVERRUNS

 

Interestingly, several studies have concluded that geotechnical risks are not exclusively attributable to ground conditions, but also involve human contributions. Based on the collective evaluation of several studies of geotechnical risks, Baynes (2010) concluded that “available information suggests that the ground conditions and the project staff responsible for the geo-engineering process are both significant sources of geotechnical risk and that the project staff may actually be the largest source.” Clayton (2001) described this “human” aspect of geotechnical risk as follows: Even a quick reading of literature related to claims, change orders, and cost overruns attributed to subsurface conditions reveals that contractual issues play a significant role. Construction contracts allocate risks between owner and builder. Typically, subsurface risks are allocated to owners through a differing site condition clause. Contractual issues are not a focus of this synthesis; however, two contract topics—bid documents and design-build arrangements—are summarized here because of their relevance to the synthesis topic. There are numerous ways in which the ground can cause problems for construction, for example due to chemical attack, heave, subsidence, groundwater flow, slope failure, excessive foundation settlement, and so on. Because of the considerable range of risks the ground can pose, it is relatively easy for an inexperienced or non-specialist designer, perhaps using routine

 

During the agency interview, SCDOT discussed the effect of its manual on claims, change orders, and cost overruns.

 

SUMMARY OF COMMON CAUSES OF SUBSURFACE CONDITIONS CLAIMS, CHANGE ORDERS, AND COST OVERRUNS AND LESSONS LEARNED FROM ALL CASE EXAMPLES

 

Common Causes of Subsurface Conditions Claims, Change Orders, and Cost Overruns The agency interviews focused primarily on methods of reducing claims, change orders, and cost overruns attributed to subsurface conditions; however, the conversations also revealed common causes. The following list summarizes some of the most frequent situations and applications associated with subsurface conditions claims, change orders, and cost overruns. • Pile overruns and underruns. • Higher than expected groundwater for – Retaining walls, – Earthworks, – Utility and sewer work, and – Drilled shaft installation. • Misclassified or mischaracterized subgrade for – Pavements, – Embankments, and – Retention ponds. • Unanticipated rock during foundation construction; such claims are especially frequent for sound barrier walls and other secondary structures with relatively small loads, relatively large numbers of foundations, and relatively sparse borings compared with more significant structures. • Mischaracterized rock for drilled shaft construction, leading to improper equipment selection and construction delays.

 

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The periodic table limits battery development

Posted on December 15, 2015 by

Preface. My book, When Trucks Stop Running, makes the case that civilization ends when trucks stop running.  The replacement for diesel fuel that everyone expects, especially because Elon Musk has told them it’s on the way, are battery electric trucks. But the Semi is years late, and not going to solve the problem, it’s only meant to run on smooth roads. What’s really needed are off-road electric tractors and harvesters, logging, mining, construction, and other essential trucks.

There are many other barriers besides a limited number of elements to choose from in the periodic table to building a battery for transportation (or utility scale energy storage). Vehicles use many finite platinum group elements, precious elements, and rare earth elements.  Plus there are dozens of challenges to improving batteries that must be overcome but can’t because of the laws of physics and thermodynamics. Nor are trucks going to be running on hydrogen: The dumbest & most impossible renewable.

 

Alice Friedemann  www.energyskeptic.com  Author of Life After Fossil Fuels: A Reality Check on Alternative Energy; When Trucks Stop Running: Energy and the Future of Transportation”, Barriers to Making Algal Biofuels, & “Crunch! Whole Grain Artisan Chips and Crackers”.  Women in ecology  Podcasts: WGBH, Jore, Planet: Critical, Crazy Town, Collapse Chronicles, Derrick Jensen, Practical Prepping, Kunstler 253 &278, Peak Prosperity,  Index of best energyskeptic posts

***

There hasn’t been much progress in batteries the past 200 years. Electric cars still cost about twice as much as gasoline cars. But who cares about cars?  Civilization depends on heavy-duty trucks, rail, and ships that are the basis of all supply chains, mining, agriculture, logging, construction industries, and infrastructure.

Batteries are simply not as energy dense as oil and never will be.  Pound for pound, oil is 500 times more energy dense than a lead-acid battery and about 120 times more than a lithium-ion battery. That makes them too heavy to move a heavy-duty truck or other large vehicle.

The periodic table limits any possibility of a major breakthrough, because there are only 118 possible elements, and most of them can be ruled out:

  • 39 are radioactive
  • 23 are far too scarce or expensive to scale up commercially such as rare earth and platinum group metals
  • 6 inert noble gases
  • 4+ toxic metals such as cadmium, cobalt,mercury, arsenic
  • too heavy
  • too scarce
  • too valuable (i.e. gold, platinum group metals)
  • too hard to recycle
  • too little reduction or oxidation potential

One of the main problems with batteries is that they’re too heavy, especially for the heavy-duty vehicles and equipment that civilization depends on.

We’ve already gained as much energy density as possible by switching to lighter and lighter elements — from lead to zinc to nickel to lithium. Consider that when you hear about yet another battery improvement.

There’s nowhere to go from here, lithium is the lightest element we can make batteries out of, with only hydrogen and helium being lighter. Lithium is much lighter than lead at 82, zinc at 30, and nickel at 28.

At the very best, scientists estimate that we could get double or triple lithium-ion performance due to the laws of physics.

Nor is there enough lithium in the world to switch from gas and diesel vehicles to electric vehicles running on lithium batteries (Vikström, H. et al. 2013). And especially not if batteries are built to store energy for when the wind and sun aren’t out. On average at least six weeks of energy storage would be needed for a 100% renewable grid. To store just one day of U.S. electricity generation, Li-ion batteries would cost $11.9 trillion dollars, take up 345 square miles, and weigh 74 million tons (DOE/EPRI 2013).  There are other battery types, but commercial development is focused on lithium almost entirely.

The very heavy, 4,647 pound Tesla Model S gets most of its mileage from aerodynamics, reduced rolling resistance, light-weight materials, and so on. The Tesla S goes further than other all-electric cars because it has more batteries.  Tesla S battery packs weigh 1,323 pounds (plus 350 lbs for the electric motor and inverter) versus 660 lbs for the Nissan Leaf (also pretty heavy at 3,340 lbs).

So let’s start over and design a high-energy battery from scratch. The first step is to look at the periodic table to choose the best elements.

Here is Aidan Stranger’s point of view (taken from a comment below): “Alkali metals (and indeed most other metals) have a greater reducing potential the further down the periodic table you go. So if reactivity were the deciding factor, caesium would be the best choice (francium’s not an option because it’s radioactive, extremely rare and very short lived). If cost is the deciding factor, sodium’s a better choice. But lithium is usually preferable for batteries because it’s lightweight; the higher specific energy more than makes up for the lower energy density.  But there are more factors to consider. Alkali metals only have one electron each. Something with more outer shell electrons could be more effective. Vanadium (with five) is often used in wet cells.  As for fluorine, forget it! Fluorine gas is far too dangerous to have in batteries, and oxygen fluorides are also dangerous and difficult to work with. I’m amazed that anyone’s even contemplated it. Unlike fluorine, cadmium can be contained fairly easily, so has been used for batteries despite its toxicity.”

periodic table reducing and oxidizing elements

 

 

 

 

 

 

Another possibility is looking at what elements could produce the highest voltage from the most reducing and most oxidizing elements.  The highest potential is nearly 6 volts with a  lithium anode (the strongest reducing element) and a fluorine cathode (strongest oxidizing element)  of -3.04 & 2.87 respectively).  Battery researchers know this and have been trying to develop such a battery since the 1960s. Scrosati et al have an excellent history of Li-F battery research and where we stand on different battery types today if you want to know the technical details.

The material electrons swim through between the anode and cathode matters as well.  Cells with aqueous (containing water) electrolytes are limited to less than 2 volts because the oxygen and hydrogen dissociate above this voltage. This is a shame, because water is very inexpensive. Lithium batteries don’t use water but this prevents electrons from flowing as well (high internal impedance) so 2.7 to 3.7 volts are achieved, rather than the maximum 6 volt potential between lithium and fluorine

The laws of physics means that there is no possibility of making a battery that rivals the energy density of oil, ever.  So the question is, if a 6 volt lithium-fluorine battery could be built — and it probably can’t — but if it could, would it be energetically cheap and powerful enough to move heavy-duty class 7 & 8 all-electric tractors, harvesters, road construction, and mining trucks?

If so, then is there enough lithium on the planet, including recycling, to make enough batteries for all electric cars, trucks, and utility-scale energy storage and lithium-battery mining trucks to haul ore to refining plants, and so on?

The main elements that lithium are dating are shown below. The rare earth elements aren’t in the battery, but are being used in the electric motor and generator, so even if lithium is recycled, the limits to EV may come from rare earth metals used other components of electric vehicles, which can NOT always be recycled:li-ion periodic table other elements in batteries

 

 

 

 

 

Related Posts: The electric grid will eventually fail without utility scale energy storage of at least a month of electricity to compensate for seasonal deficits (When Trucks Stop Running Chapter 17 The Electric Blues). Natural gas is the main energy storage now (and coal), and essential for balancing the sudden life and death of wind and solar power. But natural gas and coal are finite.  Yes, hydropower can also balance wind and solar, but mostly in the 10 lucky states that have 80% of it for just part of the year, and the few places that can afford multi-million-dollar batteries (though only for an hour or so).  The electric grid could crash from a weapon or solar flare electromagnetic pulse and be down for a year or more. Electric trucks are impossible. Without trucks, civilization fails. And it’s checkmate as well, because manufacturing uses over half of all fossil fuels, and depends on the high heat only fossils can provide to make cement, steel and other metals, glass, brick, ceramics, microchips and so on. Manufacturing can’t be run on electricity, hydrogen, or anything else, as explained in Chapter 9 of Life After Fossil Fuels. No transportation? No Manufacturing? Then no electricity generating contraptions like solar panels or wind turbines can be built. Checkmate.

References

DOE/EPRI. 2013. Electricity storage handbook in collaboration with NRECA. USA: Sandia National Laboratories and Electric Power Research Institute.

Scrosati, B., et al. 2013. Lithium batteries. Advanced technologies and applications. Wiley.

Vikström, H. et al. 2013. Lithium availability and future production outlooks. Applied Energy, 110(10): 252-266.

For a more in-depth look at battery chemistry see: Battery and Energy Technologies. Cell Chemistries – How batteries work. Electropaedia. mpoweruk.com

Posted in Electric & Hydrogen trucks impossible, Electric Vehicles, Lithium-ion | Tagged , , , , , , | 7 Comments

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

Posted on December 8, 2015 by

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

Posted on December 8, 2015 by

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 6.5 to 9 billion 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

Posted on December 7, 2015 by

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.

 

TOM KADIEN, SENIOR VP, CONSUMER PACKAGING, IP ASIA & IP INDIA, INTERNATIONAL PAPER

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

Posted on December 6, 2015 by

[ 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.

DAVID ABNEY, CHIEF OPERATING OFFICER, UPS

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.

PATRICK J. FOYE, EXECUTIVE DIRECTOR, PORT AUTHORITY OF NEW YORK & NEW JERSEY

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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