It's still early in the debate over the federal highway program, but several things are clear. First, the stakes could hardly be higher. The surface transportation system is at risk due to underfunding and administrative inefficiency, and it is not possible to have a first-class economy with a second-class transportation system.
Second, even though the Highway Trust Fund is running on fumes, it is going to be exceedingly difficult to convince Congress to increase fuel taxes.
Third, the resounding rejection of congestion pricing in New York City indicates a rough road for that fund-raising technique as well.
The message from those who study this issue professionally is that the outcome will depend in large part on the actions of the shipping and carrier communities.
"Congress will not come to a solution on their own," said Kathy Ruffalo, a former congressional staff member who now serves on the National Surface Transportation Infrastructure Financing Commission. She spoke last month at a meeting of the National Industrial Transportation League.
"We have to help them. We need to convince Congress there is an historic opportunity in front of us to revolutionize our transportation systems and ensure that we remain the world's most productive country."
Jeffrey Shane, a long-time policy professional at the Department of Transportation who most recently served as under-secretary of transportation, gave the shippers a similar message.
"It's got to happen at the grass roots," he said. "Write op-eds in your newspapers. Get people talking about it on local talk shows. Get people thinking about transportation and the possibilities that exist. Otherwise people will conclude that there's nothing we can do about this problem ... and we'll become a second-rate economy. I'm absolutely convinced of that unless we do something very different."
By something very different, Shane means radical reform of the current system. His thinking echoes that of the Bush administration's minority report in the National Surface Transportation Policy and Revenue Study Commission, which favors devolving decision-making authority to state and local governments and relying more on tolling, congestion pricing and private financing than on fuel taxes.
"Is today's federal-centric system better calibrated to deliver transportation improvements efficiently and responsively to localities than a system that vested greater resources and discretion in local governments?" Shane asked. "What would happen if we simply deemed much of today's 'federal' gas tax a 'state' tax and allowed the states to use the proceeds as they saw fit?"
American Trucking Associations President and CEO Bill Graves gave a trucking industry answer: "If we want world-class infrastructure we have to come up with world-class funding sources," he told the shippers. "I have yet to find a better one than the fuel tax, but we are open to dialogue with folks who have creative ideas."
He added: "It's got to come from somewhere. If it doesn't come from somewhere we're going to get what we pay for, which is nothing."
ATA already has determined that it will support a tax increase, provided the spending is properly focused. "This is no small offer," Graves said.
In the context of the current debate, that assertion is an understatement. Graves recounted telling a congressman about ATA's openness to an increase, only to get the reply that there is no way a tax hike will clear Congress. And, Graves added, this was a Democrat.
Ruffalo said there appear to be two camps emerging: those who believe raising the fuel tax is the only way to go, and those who believe the federal government should get out of it and let the states and private sector take over. There will have to be a melding of these views, she said.
In fact, the outlines of that melding are already visible. The majority of the National Surface Transportation Policy and Revenue Study Commission supports using a variety of funding techniques, including tolling, congestion pricing and private financing, as well as near-term tax increases. Further into the future, the commission envisions taxing vehicles on the basis of how far they drive rather than how much fuel they use. And ATA, representing the primary commercial user of the highway system, supports controlled use of alternative financing techniques as well as taxes, provided the benefits are not lost to bad decisions and inefficiency.
Even truck sizes and weights, that perennial boulder in the road for productivity improvements in trucking, are open for discussion.
On hand at the shipper meeting was Ed Hamberger, president and CEO of the Association of American Railroads, who said AAR is open to talks.
"But we continue to be concerned about whether or not an increased truck size and weight regime would further tilt what we consider to be a competitive imbalance in terms of whether or not larger trucks pay their fair share of the damage done to the bridges and highways," he said. "That's the issue for us. It is not going to be an issue of safety but it will be an issue of economics."
Graves replied that Congress will not support an initiative for the trucking industry without a clear sense that the industry is paying its fair share. "I would expect, before the day is done, some resolution of the concern that Ed expresses."
Carriers that haul heavier loads will have to pay upfront costs for new equipment, and they also have made it clear that they expect to pay more for the privilege of running heavier equipment, he said.
Shane said that many economists believe that pricing, also known as congestion pricing - tolls on specific routes at specific times to keep non-essential traffic to a minimum - is the obvious solution to highway congestion. So why, he asked rhetorically, isn't this type of pricing more widely adopted?
The answer may have come from New York, where a plan to charge vehicles a fee for entering sections of Manhattan was soundly rejected by the state Legislature. Under the plan, trucks would have paid $21 and cars $8 per weekday to enter Manhattan below 60th Street between 6 a.m. and 6 p.m.
The measure failed due to opposition from the suburbs, where it was viewed as elitist and regressive, according to a report in the New York Times. One Bronx official said it would be unconscionable to subject residents to a congestion pricing tax with no guarantee that they won't be hit with a transit fare hike as well.
ATA applauded the defeat. "Congestion pricing schemes are unfair, ineffective and ignore our real transportation needs," said Graves in a statement. "While there is a need to heavily invest in infrastructure, congestion pricing does little to relieve congestion and is merely a revenue raiser."
EPA Has $50 Million To Support Clean Air Retrofit
The U.S. Environmental Protection Agency has almost $50 million in grants to help trucking companies and others replace or clean up older diesel engines.
Congress authorized the money to help fleets replace engines that do not have modern clean-air technology, or to retrofit that technology.
EPA's rules have gone a long way toward cleaning up diesel emissions, said Margo Oge, director of EPA's Office of Transportation and Air Quality. They have led to a 90- to 95-percent reduction in ozone and particulate matter emissions over the past decade, but there still are some 11 million older engines that will remain in service for years - and they are the target of this federal program, Oge said.
Of the $49.2 million, $34.4 million will be granted to state, local and regional governments or non-profits with transportation, education or air quality missions. This includes $3.4 million for emerging retrofit technologies that are promising but have not yet been verified, and another $3.4 million for loan guarantees and low-cost loans for EPA's SmartWay Clean Diesel Finance Program, Oge said.
The balance of the money, $14.8 million, will be allocated on a state-by-state basis.
This year's funding is significantly higher than last year's $7 million, and President Bush has asked for another $50 million next year, Oge said. Congress has authorized as much as $250 million a year for five years.
Oge said that some 400,000 diesel engines have been retrofitted or replaced under the program. Half of those are off-road and the other half on-road, and most of the on-road engines were run by public fleets such as school bus and municipal operations.
Still, EPA wants more fleets - particularly smaller fleets - to take advantage of the program, Oge said.
The program supports a couple of dozen technologies such as diesel particulate filters and oxidation catalysts, as well as anti-idling technologies such as auxiliary power units and bunk heaters. For a complete list, go to the EPA website, www.epa.gov/cleandiesel, and look under Technologies.
Oge said carriers can call their EPA regional collaborative to get involved. There are seven collaboratives:
Northeast (Maine, New Hampshire, Rhode Island, Vermont, Massachusetts, Connecticut, New York, New Jersey), Debbi Edelstein, 617-259-2080.
Mid-Atlantic (Pennsylvania, Maryland, West Virginia, Virginia, Delaware, Washington, D.C.), Susan Stephenson, 443-901-1882.
Southeast (Kentucky, Tennessee, Alabama, Mississippi, North and South Carolina, Georgia, Florida), Dale Aspy, 404-562-9041.
Midwest (Ohio, Michigan, Indiana, Illinois, Wisconsin, Minnesota), Steve Marquardt, 312-353-3214.
Blue Skyways (Minnesota, Iowa, Nebraska, Missouri, Kansas, Arkansas, Oklahoma, Louisiana, Texas and New Mexico, and the area along the borders with Canada and Mexico), Wes McQuiddy, 214-665-6722.
Rocky Mountain (Colorado, Utah, the Dakotas, Wyoming, Montana), Rebecca Russo, 303-312-6757.
West Coast (California, Oregon, Washington, Alaska, Arizona, Idaho, Nevada, Hawaii, Canada and Mexico), Kristin Riha, 415-947-4140.
These organizations of state, local and private entities are designed to promote clean air initiatives, including funding and loan programs for emissions control equipment such as APUs. Rebecca Russo of the Rocky Mountain Collaborative said that individual carriers can join their regional collaborative for access to information.
For more information about these organizations, go to the EPA website, www.epa.gov/
cleandiesel, and click on Regional Collaboratives.
Russo also suggested that carriers go to the EPA SmartWay website (www.epa.gov/smartway) for more information.
FMCSA Update: EOBR, Learner Permit Standards
The Federal Motor Carrier Safety Administration may expand its proposed requirement for electronic onboard recorders to include all carriers, rather than just those who persistently violate the hours of service rules.
"I am asking [FMCSA] staff to look at ways we can expand that rule and still be within the scope of what we published," FMCSA Administrator John Hill said in remarks to the National Industrial Transportation League.
Under the proposed rule, the agency would require mandatory recorders for carriers that violate the hours rules 10 percent or more of the time, as determined in two compliance reviews within a two-year period.
That approach was the middle of three options the agency considered for its proposal. The lesser option was to keep recorders optional. The greater was to require them industry-wide.
Hill did not say definitely that the agency will switch to the universal option - he is precluded by law from discussing the proposal in detail - but this marks at least the second time he has indicated that the agency is looking at a stricter approach.
In other news, the agency proposed to revise its knowledge and skills tests for the commercial license, and to set new standards for states to issue commercial learner's permits.
Under the proposal, an applicant for a learner's permit would have to pass the knowledge test. Also, a would-be driver would have to obtain the learner's permit and hold it for a month before applying for a CDL. The state would have to check the driver's record before issuing the permit.
In addition, the agency proposed tougher documentation requirements for both permit and license applicants - states would have to check the applicant's Social Security number with the Social Security Administration, for example.
The proposal was published in the April 9 Federal Register.
Hill also said the agency is working on a proposal to create a database for driver drug and alcohol testing. This is in response to concerns about "job hoppers" - drivers who test positive for drugs or alcohol and are fired by the carrier, but soon find a way to pass the drug test without going through the required rehabilitation program and are hired by another carrier.
The agency's plan is to come up with a rule that would identify drivers who do not comply with the rules, and give carriers access to that information.[PAGEBREAK]
Volvo Evaluating Range Of Renewable Fuels
Volvo has a vision that diesel transportation can be powered by renewable fuels and thus be made carbon dioxide-neutral, so that it does not add to greenhouse gases, said CEO Leif Johansson.
Johansson, in Washington, D.C., for an international conference on renewable energy in March, said the need for CO2-neutral transport cannot be denied. Fossil fuels contribute to global warming, growing energy demand from emerging economies like China and India is increasing pressure on the crude oil market, and fossil fuels are a finite resource, he said.
"We recognize that the transport sector accounts for a significant proportion of the emissions that have adverse effects on our climate," he said. "We also recognize that we are part of the solution."
Developments in energy efficiency, hybrid technology and alternative fuels make it possible for diesels to become CO2 neutral - provided global interests undertake large-scale production and distribution of renewable fuels and governments develop uniform standards and regulations.
"Broad consensus at the highest levels is needed to ensure the successful development of CO2-neutral transport and assist in our endeavor to be part of the solution."
Volvo, for its part, has reduced energy consumption in its manufacturing processes. In North America for example, Volvo Trucks has reduced greenhouse gas emissions by 40 percent at its New River Valley plant in Dublin, Va., and by 50 percent at its Macungie, Pa., plant, Johansson said.
But the company also has committed to a long-term program of evaluating seven renewable fuels made through five processes from nine feedstocks.
The fuels are:
- Biodiesel, made through esterification or hydrogenation from rapeseed, palm and soybean oil.
- Ethanol, made through fermentation and hydrolysis from wheat, corn, sugar beet, straw, waste wood and energy crops.
- Hydrogen, made through gasification from wheat, corn, sugar beet, straw, waste wood, energy crops and organic waste.
- Dimethylether, made through gasification from the same feedstocks as hydrogen.
- Methanol, made through gasification from the same feedstocks as hydrogen.
- Synthetic diesel or renewable diesel, made through gasification from the same feedstocks as hydrogen.
- Biogas, made through gasification from the same feedstocks as hydrogen, or through anaerobic digestion from organic waste, sewage or manure.
Each of these fuels has strengths and weaknesses with respect to energy content, emissions, engineering requirements, availability and cost, but collectively they offer great potential for reduced emissions, said Anthony Greszler, vice president of Advanced Engineering for Volvo Powertrain North America. In the near term, a blend of biofuels with ordinary diesel remains the best opportunity, but the next generation of biofuels made through biomass gasification holds promise, Greszler said.
In addition, Volvo has an active hybrid driveline program, including an electric turbocompound system for long-haul applications. In this system, the electric power generated by the hybrid motor is stored for hotel functions to reduce idling, rather than for propulsion on the highway.