California’s High Speed Rail Is A 20 Year, $100 Billion Joke. Ethereum’s Founder Knows What To Do

Underground rail in Europe and Japan costs start at $100 million per mile, while in New York it’s $2.7 billion per mile. That’s a lot, but billion dollar costs aren’t uncommon in the U.S., we’ve seen it in LA and San Francisco too. And the LAX people mover, part of the Landside Access Modernization Project there, costs a billion per mile and that’s not even underground.

The U.S. is simply bad at large-scale infrastructure projects, taking longer and costing more than in the rest of the world. It’s a combination of veto points in the process built into the National Environmental Policy Act and politics that allow interest groups to extract rents. Nowhere is this more on display than California’s high speed rail efforts, which has been in planning for twenty years with little to show for it, as a New York Times expose’ shows in “How California’s Bullet Train Went Off the Rails.”.

Eight years ago James Fallows wrote in The Atlantic that California high speed rail “will cost too much, take too long, use up too much land, go to the wrong places, and in the end won’t be fast or convenient enough to do that much good anyway.” Now the Times is pointing out that:

  • Voters approved an astronomical $33 billion for high speed rail 14 years ago. It was supposed to be complete in 2020.

  • All that has been done is a start to construction “connecting a few cities in the middle of California, which has been promised for 2030” but that deadline will never be met.

  • The current cost estimate has risen to $118 billion, and at the project’s current pace “according to projections widely used by engineers and project managers, the train could not be completed in this century.” And no one knows where the $118 billion will come from.

First proposed in the 1980s, high speed rail was meant to connect LA and San Francisco in 2 hours 40 minutes. In 1999, engineers produced a ‘final report’ recommending a straightforward route along the I-5 freeway. In one example of dysfunction politicians forced a diversion through desert communities ‘to get more riders’ that meant “38 miles of tunnels and 16 miles of elevated structures” that, according to the Times, was a backroom deal for other reasons,

“I said it was ridiculous,” said Mr. Tennenbaum, the former rail authority chairman. “It was wasteful. It was just another example of added expense.”

The horse-trading in this case involved an influential land developer and major campaign contributor from Los Angeles, Jerry Epstein.

Mr. Epstein, who died in 2019, was a developer in the seaside community of Marina del Rey who, along with other investors, was courting the Los Angeles County Board of Supervisors for a 40-year lease extension on a huge residential, commercial and boat dock development.

Mr. Epstein was also a member of the rail authority board, and he became a strong backer of Mr. Antonovich’s proposal for a Mojave Desert diversion on the bullet train.

“The Palmdale route was borne of a deal between Epstein and Antonovich, absolutely,” said Art Bauer, the chief staff member on the State Senate Transportation Committee, speaking publicly on the matter for the first time.

“If I get my lease, you get my vote was the deal,” Mr. Bauer said. Though Mr. Epstein was only one member of the board, his lobbying of other board members proved critical, he said. “Epstein got the votes. The staff didn’t get the votes. The staff didn’t want to go that way.”

Instead of running directly along the I-5 freeway, the project was further diverted to run through Merced, Fresno and Bakersfield as a jobs program for those cities which meant “more delays, more complications over acquiring land, more environmental problems.”

This was pitched as being an ‘equity’ play, to serve more people in the state they’d turn the whole thing into a milk run… but then it was no longer a high speed project to connect the two major population centers. It’s how the plan morphed under then-Governor Jerry Brown and Obama transportation secretary Ray LaHood.

France’s state-owned railway company, which knows a thing or two, finally walked away from the project in disgust a decade ago:

“There were so many things that went wrong,” Mr. McNamara said. “SNCF was very angry. They told the state they were leaving for North Africa, which was less politically dysfunctional. They went to Morocco and helped them build a rail system.”

Morocco’s bullet train started service in 2018.

At this point it’s not clear whether high speed rail will ever come to California, other than a wasted demonstration project of track in the middle of the state that doesn’t connect major population centers.

Ethereum’s founder reacted to the New York Times on how challenging (impossible) the politics of large-scale infrastructure has made it to actually build a train in California – he calls it a heterodox take, but it seems self-evidently correct:

My heterodox take on US transit is that if infrastructure problems are too hard to solve, the transit of the future is airplanes, and we should just make airplanes better by (i) making them zero-carbon, and (ii) improving comfort by greatly cutting down airport security

— vitalik.eth (@VitalikButerin) October 9, 2022

Senator Joe Manchin cut a deal to support the so-called Inflation Reduction Act in exchange for permitting reform that was supposed to speed up infrastructure investment. The Inflation Reduction Act only claimed to reach that goal by raising more in taxes in the future than it added in new spending, which is being fully offset by subsequently-announced spending on student loan forgiveness.

Meanwhile, permitting reform legislative language probably wouldn’t have gone far enough and was killed for now by Republicans whom you’d expect to support it but were reluctant to give Democrats a centrist win prior to the elections.

While environmental review was once seen as a tool to protect the environment, it’s become a sledge hammer that delays environmentally-friendly projects indefinitely, raises their costs, and derails their environmental purposes. It makes green energy nearly impossible to build, and makes high speed rail projects replacing cars a pipe dream. Anyone who wants to build a greener future now sees their own tools turned against them through NIMBYism and cronyism and that’s as clear in California as anywhere else.

In the long-run, though, even doubling down on air travel we could be stuck with infrastructure problems again depending on the tech: a new for better runways and improved air traffic control flow-through, and the FAA is terrible at managing technology upgrades to boot.

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