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April 29, 2005

ICBC PAYD?

The city council of Vancouver, BC, unanimously passed a resolution on Wednesday, asking the Insurance Corporation of British Columbia -- the Crown corporation that provides most car insurance in the province -- to introduce pay-as-you-drive (PAYD) insurance. PAYD insurance is a powerful way to improve transportation, save lives and money, and reduce energy use and air pollution. The Province reports.

Some of the reader responses to this article are negative. PAYD guru Todd Litman of the Victoria Transport Policy Institute writes, "Many [readers] have the impression that most motorists would end up paying more . . . rather than less, and that rural residents would pay significantly more (only those who drive more than average among rural residents would pay more, half of rural residents would save)." Besides, PAYD would be optional.

P.S. Blowing-my-own-horn alert. The inspiration for this resolution? "A number of councillors heard of the idea at a TransLink workshop." Who gave that presentation? Me.

Posted by Alan Durning | Permalink | Comments (4) | TrackBack

April 28, 2005

Back From the Dead

Ivorybilled

The ivory-billed woodpecker, a truly remarkable bird that was believed to have gone extinct 60 years ago, has been sighted again in the the Big Woods region of Arkansas. According to John W. Fitzpatrick, director of the Cornell Laboratory of Ornithology, it became known as the Lord God bird because people seeing it would exclaim "Lord God, look at that bird."

It's heartening to get a second chance at conserving a species, even though in most cases we only get one. According to a 2002 report by the Natural Heritage Program, many species in the Northwest are teetering on the brink. Here's a rundown of the most endangered species in the region:

Species

Extinct

Mammals At-risk

Birds

At-risk

Alaska

2

14.6%

5.6%

California

53

16.4%

4.8%

Idaho

1

1.0%

0.7%

Montana

3

1.9%

1.8%

Oregon

12

4.0%

2.4%

Washington

3

7.1%

3.0%

UPDATE: A truly first rate article in the New York Times. Here's the crux:

It wasn't a miracle. It wasn't luck. And it wasn't simply the resilience of nature, although that helped. The reason for the astonishing re-emergence of a mysterious bird is as mundane as can be. It is habitat preservation, achieved by hard, tedious work, like lobbying, legislating and fund-raising.

Posted by Eric de Place | Permalink | Comments (0)

Bush's Latest Energy "Plan"

Approaching the summer "driving season" when gas prices often spike, President Bush has pumped up a new set of energy proposals. Even the mainstream media regard them as window dressing. (Witness the Washington Post.) But I'll take the proposals as serious and comment.

1. The Bush administration proposes to allow oil refineries on abandoned military bases, claiming that limited refinery capacity is driving up gas prices and that it's hard to get permission to build new refineries. Military bases, as federal property, are exempt from most local regulations.

The overwhelming cause of high motor fuel prices is high world oil prices. World oil prices are high because of lots of demand, especially from the United States and China, and -- especially -- because the oil markets have built a big "risk premium" into prices. "Risk premium" is Wall Street talk for cold sweats. Oil traders are afraid that world oil supply will be disrupted dramatically by violence in the Middle East, such as by crippling the main Saudi oil port. These fears are thoroughly justified. The Bush Administration's military policy in the Middle East is behind this "risk premium."

World oil prices are especially high for the United States because the dollar is down. The dollar is down mostly because of massive federal deficits, created by tax cuts without corresponding spending cuts. The Bush Administration is the cause of this fiscal policy.

Some observers also think the world is already close to "peak oil"--the highest annual rate of production we'll ever reach. At peak oil, most analysts believe, prices go up and become more volatile. This is bad. It may even be very, very bad. According to some few analysts, peak oil also hearkens all manner of other terrible things--pretty much the end of life as we know it. It's the veritable apocalypse. (Excuse my sarcasm. It's just that some of the peak oil folks strike me as scary: they seem positively enthusiastic about dreaming up worst case scenarios. These people, possessed not by reasonable concerns about peak oil but instead gripped with a cult-like obsession about it, remind me a lot of the Y2K cult that held sway in the late 1990s. They also remind me of fringe fundamentalist Christians who believe the end is near, that Armageddon is upon us, and that the Rapture is imminent.)

Refinery capacity is a tiny bit limited in a very few places--the Northwest not one of them--because the nation's fuel appetite is bloated by falling fuel economy (aka, trucks supplanting cars). But mostly, Bush's proposal is irrelevant. Rescuing the dollar by showing serious intent to end deficit spending would have more short-term and long-term benefit to US oil purchasing power. Fully inflating car tires would have far more benefit. And, of course, finding some way out of the quagmire in Iraq would help lower oil prices.

As WaPo notes:

Industry leaders said it is not clear that companies would want to build new refineries because the business historically has not been highly profitable. While demand and profit margins are high now, companies are not convinced those margins will remain high enough to justify new refineries.

2. Bush's plan includes "renewing tax credits for hybrid vehicles and adding them for efficient "clean diesel" vehicles."

That's a good idea. It's just a tiny idea. Hybrids and clean diesel together make up such a tiny share of the vehicle fleet--well under one percent--that they have hardly any effect on total fuel demand. Why not extend the idea to the entire fleet through feebates?

3. Bush also proposes to override state and local government and make the federal government the ultimate arbiters of proposals to build liquid-natural-gas terminals. At least five of these risky facilities are proposed in Cascadia. Such federal intrusion on state and local land-use regulations is wholly unwarranted. If LNG facilities are worth building, the communities that accept them should have a say.

P.S. Oh, and the Bush "plan" also tries to create new incentives for building nuclear power plants. As if nuclear power needs more subsidy than it already has. Even with these subsidies, though, it's unlikely anyone will build any.

Posted by Alan Durning | Permalink | Comments (47) | TrackBack

Salmon Go To Court

In court now, the latest round in the fight between the federal government and the pro-salmon coalition of tribes, conservationists, and sport fisherman. The salmon advocates want to hold the feds responsible for the harm done to salmon by the Columbia and Snake River dams.

The most (unintentionally) hilarious quote from today's coverage comes from the Seattle Post-Intelligencer:

...the Justice Department argued that the federal agencies that control the 14 dams on the Columbia and Snake rivers cannot be held responsible for the existence of the dams...

Uh... didn't the federal government build the dams in the first place?

Of course, the real issues are much more complex than I'm giving credit for here. Much hinges on the extent to which the government is responsible for dam-induced salmon mortality and what it must do to protect the fish. Perhaps the biggest issue this summer will be whether the dam operators spill more water for fish passage, which will likely raise the cost of electricity in a drought year when rates may already be high. 

Posted by Eric de Place | Permalink | Comments (0)

BC's Growth Forests

British Columbia boasted the fastest provincial economic growth in Canada last year. A 3.9 percent increase in GDP easily outstripped the national average of 2.8 percent. The headlines in today's Vancouver Sun trumpet the forest industry as a principal cause. But therein lies a certain danger.

Just two days ago, the Vancouver Sun prominently warned that BC's forest industry would soon contract. A weakening US housing market, coupled with decreased buying power from the US dollar, will reduce the import market and drive down lumber prices by 10 percent in each of the next two years, according to economic forecasters. 

BC's recent economic growth is certainly encouraging, but over-reliance on the forest industry is potentially cause for concern. Forestry has a troublesome history of being unpredictable--and that volatility can result in economic whiplash. All too often, aggressive cutting suddenly gives way to layoffs and idled mills when forest products hit the doldrums. It's wise to prevent that boom-bust effect from rippling throughout the entire province.

Posted by Eric de Place | Permalink | Comments (0)

Article of the Day

William Saletan, always a perceptive analyst of US politics around abortion and reproductive health, has a perceptive Slate column on the alleged surge in pharmacists refusing, on conscience, to prescribe Plan B.

Like Saletan, I've been reading the news stories on this alleged controversy and finding them overblown. There's not much of a trend, and that's good news, whether you're concerned about lowering the abortion rate or protecting women's rights or, like me, doing both.

Posted by Alan Durning | Permalink | Comments (0)

HOT Lanes, Black Boxes, and Fairy Wings

The golden boy of Northwest news reporters, Timothy Egan, ventures to southern California to compose an excellent overview of the US trend toward high-occupant/toll (HOT) lanes in today’s New York Times. (Money quote: The Gubernator says, "Californians can't get from place to place on little fairy wings.") All across the United States, variable tolls—congestion pricing—are becoming the new conventional wisdom about how to do road expansions. In a few places, existing HOV lanes are up for conversion to HOT lanes.

The article shows the progress that road pricing has made in public acceptance, in part because it passes muster with both libertarians and sustainers. (Something I’ve noted here and here.)

But now consider the limitations of HOT lanes as a congestion pricing strategy. They have to be done lane by lane, road segment by road segment, and against considerable opposition and expense. The Cascadia region has more than 200,000 miles of streets and highways. It’ll be decades before congestion pricing can be widespread through HOT lanes alone.

A long shot alternative, which looks like the odds-on favorite when you look far enough into the future, is comprehensive, technology-based, road-use pricing such as that being tested experimentally by the Puget Sound Regional Council  and Oregon State University.

The PSRC pilot project has several hundred black boxes installed in the cars of Puget Sound area volunteers. Each month, the black boxes are replenished with about $100 of credit. Over the month, a satellite monitoring system sends instructions to the box for debiting road-use fees, in real time, based on the participant's driving: congestion and other factors on each segment of road driven. The entire road network is priced, virtually—most miles are very inexpensive; a few are very expensive. (A bonus for the volunteer participants in this pilot is that they get to keep any of the $100 credit that they don't spend by driving.)

Somewhat lower tech is the OSU technology. It’s a mileage meter with a small radio transponder installed in test vehicles. Sensors at gas stations read each test vehicles’ mileage at each fill up and add a per-mile charge to the gas bill—in place of fuel tax.

The political constituency for comprehensive road pricing is smaller than that for HOT lanes, because the highway-building industry likes HOT lanes (or any other means of generating millions of dollars for new roads). But technology trends could bring comprehensive road pricing into the real world more quickly than you’d imagine.

Consider a few things. Information technology is moving rapidly into new vehicles. Virtually all new luxury cars and half of all new GM cars now have GPS navigation systems installed in them when they roll off the assembly lines. The cost of these systems is falling (possibly in accordance with Moore’s “Law”). Car alarm companies are starting to offer satellite monitoring that’s connected to onboard navigation systems: if your car is stolen, the security company can tell you—or police—exactly where to find it. (Or, if you forget exactly where at the mall you parked, you can phone in to the security center and get directions.) With the fancier car security systems, the security center can even turn off and disable the engine if the car is stolen.

In the last twenty years, home security systems have swept the new house market in the Northwest. Virtually all new-construction homes have remote-monitored home security systems. It seems likely to me that new cars will be next, certainly within the next 20 years if not the next five.

Wireless connectivity through information technology is riding into the vehicle fleet on the horses of navigation and security. But once it’s there, it seems a small step to use the same technology for other purposes, such as pay-as-you-drive insurance (GM is starting to do this with its proprietary OnStar system, as we noted here) and such as road user charges.

In the end, it becomes technically possible to charge drivers in fairly direct proportion to the social costs of their driving: The per-mile charges could replace fuel taxes and vehicle registration fees and taxes entirely (and could also replace some general levies such as local sales taxes). They could be adjusted for time of day or roadway congestion, fuel economy, emissions ratings, and even engine noise.

Now, the convergence of all of this Buck Rogers technology is still some years in the future. But it’s probably a lot closer to us than a comprehensive system of road use charges built up one lane segment at a time.

Posted by Alan Durning | Permalink | Comments (3) | TrackBack

Enron: Ask Why

The new documentary, "Enron: The Smartest Guys in the Room," (trailer) is not only an informative, entertaining and extremely well-produced exposé of Enron; it's a brilliant primer on the 2001 energy crisis that swept the west, and a great backgrounder for current efforts to rescue Portland General Electric from Enron (read the latest from the Business Journal of Portland). It opens in Seattle this weekend. I can't find any information about releases in other Cascadian locations. Anyone?

Posted by Parke Burgess | Permalink | Comments (3)

April 27, 2005

Gas Tax on the Little Guy

In all the heated debate about Washington's new gas tax increase of 9.5 cents per gallon, one thing has been generally overlooked: the effect of another sales tax on lower-income residents. Today, however, the Seattle Post-Intelligencer ran an interesting article on the subject. But I'm still left wondering whether the tax increase is a good idea.

According to the Economic Opportunity Institute, Washington has the most regressive tax structure of any state in the nation. Because the Evergreen State assesses no income tax, but relatively hefty sales taxes, the burden of taxation falls more heavily on poor people here than anywhere else in the U.S. According to this study (pdf) from Citizens for Tax Justice, which is a tad dated now, the lowest-earning fifth of Washington residents pay more than 17 percent of their income in taxes, while the wealthiest 1 percent, pay less than 4 percent. So slapping on another 9.5 cents to the price of gasoline is conceivably a tough blow for lower wage folks.

But when I read the examples of people hurt by high gas prices I mostly didn't have the reaction I expected to. Instead, I was struck by how our reliance on cheap fossil fuels has lured us into wasteful ways.

On the one hand, it seems tragically unfair for low income workers to face yet another financial hardship. On the other hand, typical examples are of people commuting 15 miles to daycare and another 15 miles to work (presumably, a total of 60 miles each day). Another person complains that her husband drives an hour each way to work.

In one bizarre example, a person complains about pumping $10 worth of gas to drive her minivan 14 miles. Yikes. Even though minivans are as fuel-wasting as SUVs, I'm highly skeptical of her claim. According to AAA, Seattle's fuel is $2.51 a gallon, on average. So she must be getting only 3.5 mpg or else she's wildly exaggerating. (For comparison, giant Hummers get about 10 mpg.)

To cite another example, of a landscaping business, "their four pickups log 400 to 500 miles a week, petroleum is in the PVC irrigation pipes and even woven into their fertilizers." My thought was: our vehicle fleet is inefficient, our homes are widely scattered (necessitating that 500 miles/week), and we have yards so big that we hire others to tend them, often with intensive chemicals.

Certainly, it's not good that small businesses are struggling to stay afloat or that folks can barely afford to get to work. It's more evidence of the serious economic consequences of energy inefficiency. As I've argued before, with respect to energy consumption in an era of rising prices, our economy is not in an enviable position. Japan can generate 3 times as much wealth with the same amount of energy; Germany can generate about twice as much.

Simply put, as prices rise, whether through taxation or market forces, it's doubtful that we can sustain lifestyles where people typically drive 60 or more miles a day, just for essential travel. We'll either need to live much closer to work, drive vastly more efficient vehicles, or rely on better transit networks.

For the sake of lower income workers and many small businesses--not to mention the environment--we need to restructure our energy use. Especially, we need to consume less petroleum, which can be accomplished in a variety of ways: efficiency, denser neighborhoods and better transit options, and alternative energy.

So to the extent that this new gas tax encourages better development, greater efficiency, and less consumption, I suppose it's probably worth the pain. Of course, there are other (and better) ways of restructuring our energy use than raising gas taxes. Plus, it seems unfair that most of the hardship of this approach is shouldered by those who can least afford it. 

Posted by Eric de Place | Permalink | Comments (6)

April 26, 2005

Traffic Jam

I've been putting off commenting on Washington State's recently-passed $8 billion transportation package -- funded by a 9.5 cent per gallon increase and new weight-based vehicle fees -- until I could figure out exactly how I feel about it. I still can't. It's complicated.

In general, I like taxes on gasoline.  Gasoline carries many costs -- security, air and water pollution, climate-warming emissions, and the like -- that aren't captured by the market price.  Which means that, no matter how high the market price for gasoline goes, it's still not high enough to account for all the externalities. So in theory I should be in favor of a gas tax increase.

In practice, though, it matters a lot how the money raised through a gas tax is used.  In Washington state, gas taxes are dedicated to roads and car ferries.  As a consequence, gas taxes in the state have tended to accelerate sprawling development at the ever-receding urban fringe -- in precisely the places where residents have to drive most.  So even though gas taxes increase the cost of gasoline, they've also, in effect, increased its consumption.

This time, however, some anti-sprawl advocates in Washington seem genuinely pleased with the transportation package, touting it as a "win."  They give three reasons:  the package focuses on fixing existing highways, rather than building new ones; it provides nearly half a billion in funding for non-car-centered projects such as bike and pedestrian investments, special-needs transit, and a safe routes to school program; and, while it does provide nearly a billion dollars to I-405, the money is flagged for managed (i.e., tolled) lanes that encourage carpooling and transit.

I'm a little less sanguine, though.  And not just because increasing highway capacity on I-405 may foster sprawl, but more because the package provides $2 billion for my pet peeve: rebuilding the Alaskan Way Viaduct.

I think that the city's preferred option for replacing the Viaduct with a tunnel -- which would cost $4.5 billion to replace 2.2 miles of highway, plus some work to reconnect the street grid -- is wildly expensive, especially given that transportation planners think that they could raise at most $100 million by tolling the facility.  (In other words, the tunnel's supporters think that it's worth 45 times as much as drivers themselves would be willing to pay for it.)  Construction is likely to cause serious disruptions from 2009 through at least 2016, and according to the Seattle P-I, during construction itself...

traffic will likely be shifted off the old structure onto downtown surface streets and onto Alaskan Way past waterfront businesses. A temporary bypass may be built between Broad and Pike streets.

Which of course makes me wonder -- if the Viaduct is so darn crucial that we have to spend $4.5 billion to fix it, how is it that the city thinks it can survive during constrction, with all of the Viaduct traffic forced onto city streets?

Now, really, a tunnel isn't the worst thing in the world.  By 2016 or so, Seattle might have a reasonably attractive waterfront -- though a high-speed highway nearby, coupled with a decade of neglect, may mean that not too many people will be inclined to live there. 

But what really gets me is this:  the $2 billion in state funding will disappear within two years if the region can't find the rest of the money to build the tunnel.  The state's just going to take it away, and spend it somewhere else.  So the region (mostly Seattle) is going to have to commit another $2 billion, at least, to lock in the state funds.  Seattle residents are already taxing themselves for the monorail; we're helping to pay for light rail; the state is phasing in a 14.5 cent per gallon gas tax; we're facing expenses for repaving I-5 and rebuilding the 520 bridge; and on top of that, Seattle is still going to have to come up with a couple of billion extra to pay for the rest of the Viaduct.

Here's the risk: with all of the expensive transportation mega-projects underway right now, there's a distinct chance that Seattle residents will balk at the cost of the tunnel -- which was the most expensive of the proposed designs for replacing the Viaduct.  But with $2 billion in construction money already on the table, the city may opt for one of the lower-priced options:  a surface highway, or simply rebuilding the existing structure.  Which would mean that Seattle would be saddled with a waterfront highway for the next 50 years, just as it had one for the preceding 50.

One hundred years of highway. Ugh.  I'd much rather have nothing than that.  It would be much better to use the $2 billion to replace the seawall, tear down the Viaduct, and invest in a plan to move people into and through downtown without a gold-plated highway. 

Any takers, Seattle?

Posted by ClarkWD | Permalink | Comments (9)