US transport boss explores Spain’s high-speed rail system

May 30, 2009 at 11:00 am

(Source: AP, NY Times, The Infrastructurist, The Atlantic)

The U.S. transportation secretary says Spain’s bullet train system is a model to follow as America plans how it will spend its stimulus package. Ray LaHood says the $8 billion allocated for high-speed railways in the United States will improve the country’s infrastructure, spur economic growth and reduce greenhouse gas emissions. As part of his visit to Spain, he took a ride on the AVE from Madrid to Zaragosa and then hung around in a railway control center with the transport minister for a while. On Saturday he met with Prime Minister Jose Luis Rodriguez Zapatero, the guy who’s has really been the force behind Spain’s recent investment.

When President Obama announced in April his $13 billion plan to propel the United States into the age of high-speed rail, he tipped his hat to the trains that zip between the cities of the Old Continent at up to 217 miles an hour.  Spain opened its first Alta Velocidad Española, or AVE, high-speed train route in 1992, between Madrid and Seville. The network has grown to nearly 2,000 kilometers and stretches from Malaga on the south coast to Barcelona, which is north and east.

Spain, an enthusiastic latecomer to high-speed rail, on Friday will complete a six-day tour of European transit systems that it presented to the American transportation secretary, Ray H. LaHood. Officials say the Spanish experience could hold lessons in what works and what does not.

Supporters say the AVE has begun to transform the country, binding remote and sometimes restive regions to Madrid and leading traditionally homebound Spaniards to move around for work or leisure.

“Spaniards have rediscovered the train,” said Iñaki Barrón de Angoiti, director of high-speed rail at the International Union of Railways in Paris. “The AVE has changed the way people live, the way they do business. Spaniards don’t move around a lot, but the AVE is even changing that.”

Such is the train’s allure that politicians of different stripes have made extravagant promises to lace the country with a sprawling network. Under a plan devised by Prime Minister José Luis Rodríguez Zapatero, Spain will have 10,000 kilometers (more than 6,200 miles) of high-speed track by 2020.

In a backhanded tribute, the train is perceived as such an effective tool of political cohesion that the Basque militant group ETA has effectively declared war on a project that would link the Basque region to Madrid.

As has happened elsewhere, the high-speed train is stealing passengers from the airlines: The 2.5-hour route between Madrid and Seville handles about 89 percent of railway and air traffic between the cities, according to Renfe, the state railway operator. In its first year, the Madrid-Barcelona route lured nearly half the five million passengers who would normally fly between the cities, Renfe said.

Supporters say such statistics bolster the train’s green credentials: The International Union of Railways says a high-speed train can carry eight times as many passengers as an airplane over a given distance, using the same amount of energy and emitting a quarter of the carbon dioxide for each passenger.

Here in Lleida, a town of 125,000 in northeastern Spain surrounded by plains that produce half of the country’s apples and pears, the inauguration of a high-speed route to Madrid in 2003 cut the journey to the capital to two hours from five and a half, and the extension of the line to Barcelona last year halved that trip to one hour.

The reception from the US media for the Secretary’s interest in rail has been surprisingly positive.  Voicing its support for the deployment of a high-speed network, the Atlantic notes that many of the nation’s important metropolitan corridors manage to have unbearably congested highways and airports. In the few places where intercity rail has the capacity and speed to be competitive with alternatives, Amtrak has no problem filling its trains. Rail construction obviously has high upfront capital costs, but they’re likely to prove worth it in the long run, particularly given that trains can run on electric power, which will grow steadily greener and become increasingly attractive in a world of rising oil prices (check).

And of course, airline service has not only become miserable and unreliable as the system has become overburdened and unprofitable, but it’s also pretty dirty, in terms of carbon emissions. The standard approximation has planes emitting as much per mile as cars, but of course planes travel much longer distances and at higher altitudes, where emissions have a more significant effect.

Word is, the president really wants to leave office with a high-speed rail network as part of his legacy. Sounds good to me.

It is natural to think if a country like Spain, whose political system is often gridlocked and often confronted by the militant ETA in the Basque region, canembark and accomplish such an ambitious national project, why can’t the same be accomplished in the United States?  A columnist at the Infrastructrist has rightly captured this thought: The conversation about all this in Spain seems very lucid in contrast to our own,  where the political system is so debilitatingly gridlocked that we can think in the smallest terms. Keep in mind that this a $150 billion project for a country with an economy one-tenth the size of ours. So if we were doing things on the Spanish scale, we’d be devoting more than a trillion dollars to passenger rail. Imagine what that debate would sound like in Congress and on talk radio. Rightly said!

Breaking News: (Update 2) Germany Selects Magna As Partner For Opel

May 29, 2009 at 9:46 pm

(Source: BBC & CNN Money)

Germany has agreed a deal with Magna International, a Canadian-Austrian car parts maker, to take over Opel, part of the European wing of US carmaker GM.

Talks in Berlin continued into early Saturday before Germany’s finance minister announced a deal.

The German government is expected to provide an immediate loan facility of 1.5bn euros ($2.1bn, £1.3bn).

But 2,500 jobs in Germany could be lost and a UK minister has accepted “there is excess capacity” in GM’s operations.

Finance Minister Peer Steinbrueck told journalists outside the chancellery shortly after 0200 local time on Saturday that a deal had been agreed.  Earlier on Friday, Opel and Magna’s reached a preliminary agreement with GM.

“We have an agreement,” said Mr Steinbrueck, the AFP news agency quoted him as saying, following six hours of talks between German politicians, US government officials and executives from GM and Magna.

Magna, teamed with Russian auto maker OAO GAZ Group (GAZA.RS) and state- controlled OAO Sberbank (SBER.RS), has said it will put more than 500m euros ($700m; £435m) into Opel.

Steinbrueck said the parties involved also agreed on the model of a trusteeship for Opel for the interim period.

Speaking after the marathon talks that started Friday afternoon in Berlin, Magna co-Chief Executive Siegfried Wolf said he expects the deal with General Motors to be signed in five weeks.

Wolf confirmed that Magna will provide the short-term cash demand of EUR300 million to Opel, which was one of the key reasons for the German government to delay the decision on state aid earlier this week. He said the funds would be available Tuesday.

Italian auto maker Fiat SpA (FIATY), Magna’s last remaining contender for Opel, skipped the meeting inBerlin, citing a lack of transparency over Opel’s financial condition.

Although the decision on the fate of GM’s European operations eventually rests with the U.S. government and GM itself, Berlin played a key role in the negotiations by providing billions of euros for the bridging finance.

The German government took a deep interest in the sales process as it faces general elections in the fall, and the prospect of seeing thousands of Opel employees losing their jobs made a rescue plan for the traditional car maker a top priority for both parties in Germany’s current grand coalition.

Ruesselsheim-based Opel employs around 25,000 workers. It is part of GM’s European operations that employ more than 50,000, with manufacturing plants in Spain, Poland, Belgium and Britain, where Opel cars are sold under the Vauxhall brand, as well as engine and parts sites such as Aspern, near Vienna.

German Economy Minister Karl-Theodor zu Guttenberg said he arrived at a different risk evaluation, but added he supports the deal and will help to see it completed.

A press conference has been scheduled for Saturday at 8:00 a.m. GMT to explain further details of the Opel deal, Finance Minister Steinbrueck said.

Bob Lutz takes a hard left: Retiring GM product czar loves auto task force

May 29, 2009 at 4:31 pm

(Source: Autoweek)

Bob Lutz, General Motors’ soon-to-retire product czar, said Thursday that not only does he support and endorse the work of President Barack Obama’s automotive task force, but he’d also like to see the government-industry entity become a permanent fixture.

 “Benevolent oversight and two-way communication between Washington and the auto industry” would be a good thing, Lutz told members of the Automotive Press Association at a luncheon Thursday in Detroit.

“Jeez, it only took 30 years for somebody to finally figure it out,” he said.

Lutz cited–and praised–the new federal fuel-economy regulations as an example of what industry and government can do when they work together. Though the new CAFE requirements mandate 35.5 mpg by 2016, Lutz said many parts of the new rules reflect industry positions on the particulars of the law.

The positions voiced by Lutz seem at odds with the suggestion that the GM product vice chairman is leaving GM at year’s end in part because he doesn’t want to deal with life at “Government Motors,” which GM has been called since taking government loans and accepting task-force oversight.

On the contrary, Lutz said, he began to warm to the task-force members when they visited Detroit and seemed more interested in the 560-hp Cadillac CTS coupe than in GM’s more economical offerings.

“That was sort of the moment that I began to take heart,” Lutz said.

(FYI -You can also listen to an audio commentary by folks @ Autoweek on Mr. Lutz words about GM’s future.)

India ponders fuel price deregulation; News sparks a rally for refinery shares

May 29, 2009 at 3:39 pm

(Source: Bloomberg & Wall Street Journal)

India may lift a 5 1/2-year cap on pump prices of gasoline and diesel, the first market-opening move by Prime Minister Manmohan Singh since his election victory this month. Shares of refiners surged.

Oil Minister Murli Deora said he plans to seek cabinet approval within six weeks to free up fuel prices from state control. “The government has taken notice and is working on” a proposal, he told reporters in New Delhi.“We will ensure that fuels reach people at the right time and at the right price,” Deora said today.

Indian state-owned refiners used to set retail fuel prices twice a month after the government ended controls on oil products in April 2002. That stopped in December 2003 after the then Bharatiya Janata Party-led government barred them from raising rates before the May 2004 elections.

State-owned Indian Oil Corp., the nation’s biggest refiner, surged to a 16-month high on optimism the new government will scrap a policy that caused a loss of 36.7 billion rupees ($776 million) in the nine months ended December after oil prices rose to a record in July. Lifting the cap will enable refiners to profit from crude oil’s 47 percent advance this year. 
State-run fuel retailers Indian Oil, Hindustan Petroleum and Bharat Petroleum are likely to have posted combined losses of 1.03 trillion rupees ($21.68 billion) for the year ended March 31, due mainly to sales of products at government-mandated prices.  The retailers are partly compensated through oil bonds issued by the federal government, and partly by discounts given on crude oil by upstream companies like Oil and Natural Gas Corp.

Mr. Deora said the government would consider deregulating prices of natural gas only after a decision on deregulating oil prices is taken.

“Free pricing will solve most of the problems for the Indian state-owned oil companies,” said Vinay Nair, a Mumbai- based analyst at Khandwala Securities Ltd. “A change in ratings of these companies or changing our call on the stocks will depend on what real policy changes the government makes.”

Indian Oil gained 6.8 percent to 609 rupees in Mumbai trading, the highest level since Jan. 17, 2008. Bharat Petroleum Corp., the second-biggest state-run refiner, climbed 3.7 percent to 464.70 rupees, while Hindustan Petroleum Corp. added 8.4 percent to 362.95 rupees.

Indian Oil shares have climbed 42 percent since Prime Minister Singh’s government was re-elected on May 16 without the support of communist lawmakers who oppose fuel-price increases. That led to speculation that the government will relax the pricing curbs. The benchmark Sensitive Index has gained 20 percent in the same period and advanced 52 percent this year.

State refiners sell automobile and cooking fuels below cost, at prices fixed by the government, to curb inflation which has held below 1 percent for 11 straight weeks. Retail fuel prices haven’t been changed since January, when they were cut for the second time in two months.

Breaking News: Opel and Magna Reach Preliminary Agreement with GM; UK’s Vauxhall may be next for Magna

May 29, 2009 at 2:36 pm

(Source: Automobile Magazine & Autoblog & CNN Money)

The Opel affair

General Motors and Canadian auto supplier Magna have reached a preliminary deal regarding GM’s European Opel brand. According to Reuters, the companies have agreed on a plan to allow Magna to invest in the German automaker.

“We have an agreement in principle between GM and Magna,” one source said.  Magna and GM still have details to work out before the two are expected to meet with German Chancellor Angela Merkel. One government spokesman said separately that the meeting had been pushed back until 6:00 p.m. to provide time for the ongoing negotiations. 

While an agreement has been reached between the two parties, the German government – which has agreed to provide financial assistance for Opel – needs to sign off on the matter. Magna and GM have signed a memorandum of understanding that will reportedly help Opel secure some 1.5 billion euros ($2.1B USD) in bridge loans, as well as shore up protections against creditors in the event of a GM bankruptcy.

For its part, Magna will reportedly pour somewhere between 500-700 million euros into Opel, and it plans to cut 10% of the marque’s workforce in Germany – about 2,500 employees.   Interestingly, GM will reportedly hold on to a 35% stake in the brand, while Opel workers themselves will end up with 10% of the company.

The future of Vauxhall?

No word yet on what will happen to Vauxhall, Opel’s UK twin.  But it looks like Magna might also be adding Vauxhall to its portfolio.  According to a  report filed by Dow Jones on CNN Money the U.K. Business Secretary Peter Mandelson said that it is “pretty likely” Canadian car components makerMagna International Inc. (MGA) and General Motors (GM) will become shared owners of U.K.-based carmaker Vauxhall.

Speaking to Sky News and BBC television, Mandelson said he would seek a “very early” further meeting with the parties once the initial talks had been concluded to secure a “cast iron guarantee” on U.K. production and employment.

“I have no doubt that the British government … will be asked to underwrite the deal financially and I have already said that the British government in principle would be prepared to consider that, but that would be linked to production and employment in the U.K.,” he said.

GM’s U.K. unit has two plants manufacturing Vauxhall, Opel (OPL.V), Renault ( RNO.FR), and Nissan (NSANY) models and employs a total of about 5,500 people.

He added Magna’s willingness to contribute bridging finance supported its case. Italian automaker Fiat SpA(F.MI) said earlier it remained interested in Opel but there was nothing more to discuss until GM, the German government and U.S. Treasury had settled their differences.

Fiat pulls out of Opel talks with German government over funding

May 29, 2009 at 1:01 pm

(Source: Times Online, UK)

Fiat has pulled out of talks with the German Government about Opel, blaming “unreasonable” funding demands, but emphasised that it was not withdrawing its bid for General Motors’ European unit, which owns Opel and Vauxhall.

Sergio Marchionne, Fiat’s chief executive, said that Germany had asked his car group to provide emergency funds for Opel, which would expose it to “extravagant risks”.

Mr Marchionne said “The last round of requests which would require Fiat, among other things, to fund Opel on an emergency basis while the German Government determines the exact timing and conditions of interim financing, would expose Fiat to unnecessary and unwarranted risks.”

Mr Marchionne said that he had not been granted full access to Opel’s financial records and so it was unreasonable to ask Fiat to provide emergency funds. Because today’s meeting will focus specifically on Opel, Fiat would not be attending, he said. However, he said that Fiat remained interested in a potential deal with GM.

“We remain committed to finding ways to bridge the expectations of both General Motors and the German Government, but the emergency nature of the situation cannot put Fiat in a position to take extravagant risks,” he said.

Gareth Thomas, the Trade Minister, will attend the emergency talks in Brussels today. A Commission spokeswoman said: “The aim of the meeting is to exchange information and ensure a level playing field for co-ordination.”

GM is heading for what would be the biggest bankruptcy by an American industrial company after bondholders owning about 20 per cent of its $27.2 billion (£17 billion) unsecured debt agreed to accept a 10 per cent stake in a restructured company and warrants to buy a further 15 per cent in return for forgiving its debt.

A news report from Reuters indicates that top ministers from the German government will meet in Berlin to discuss the future of the Opel unit of General Motors (GM.N) on Friday but no U.S. government officials or representatives from GM will join in, a German government official said on Friday.

Potential bidders Magna and Fiat will not participate in the meeting either, said the official who requested anonymity.

U.S. Energy Secretary Steven Chu rules out raising petrol prices to European levels through increased taxes or regulation; says politically infeasible

May 28, 2009 at 11:10 pm

(Source: Financial Times)

Reducing America’s reliance on oil by raising petrol prices to European levels through increased taxes or regulation is not politically feasible, says Steven Chu, US secretary of energy.

The admission comes as Congress considers a cap- and-trade system that opponents say will substantially increase petrol prices just as oil prices soar to their highest level in six months.

In the past Mr Chu, a Nobel laureate, has argued that, if the US wanted to reduce its carbon emissions, policymakers would have to find a way to increase petrol prices to levels in Europe. But in an interview on Wednesday with the Financial Times, Mr Chu said: “At this moment, let me be frank, it is not politically feasible.”

Higher petrol prices are likely to be one of the biggest potential sticking points ofPresident Barack Obama’s cap-and-trade system when the bill moves from the Democrat-controlled House of Representatives to the more conservative Senate late this year.

Mr Chu’s move against using taxes to raise US petrol prices is likely to frustrate environmental advocates who believe that the only way seriously to change Americans’ consumption habits is through higher prices.

Unlike Europe, the US hardly taxes its fuel, leading to pump prices that are often one third of those in Europe and to the average American consuming double the amount of oil of his European counterpart.

But Mr Chu warns that Americans will have to learn to live with higher petrol prices even if Washington does not enact policy that boosts them.

“Regardless of what one does in any sort of taxation, I believe that prices of oil and natural gas will go up in the coming decades,” he said, adding: “They will naturally go up just because of fundamental supply and demand issues.”

Mr Chu was adamant that a cap-and-trade system would be necessary to cut emissions. “We need to begin to put a price on carbon. We need to ratchet down the carbon,” he said.

The bill currently under consideration in Congress would reduce emissions by about 2 per cent a year.

A key question, however, was “how to help the US make the transition”, he said. Many states are heavily dependent on coal, or have energy-intensive industries, and the administration will need to win over lawmakers from these states to have a chance of passing the legislation.

Click here to read the entire article.

British government gets a shock over its electric vehicle plan

May 28, 2009 at 10:35 pm

(Source: Autobloggreen & Royal Automobile Club Foundation)

A new study by the Royal Automobile Club Foundation found that as many as 6.75 million British drivers are thinking about or could consider buying an electric vehicle – once they become available, of course. RAC surveyed 1,000 motorists over two weekends this month and asked the question: “Would you consider or are you planning on purchasing an electric car within the next five years?” Twenty percent picked either “Yes, would consider” or “Yes, planning on purchasing an electric car.” We’re right there with you, says the UK government, which will offer incentives worth up to £5,000 for EVs starting in 2011.

Also, the RAC points out that 20 percent of 33.8 million drivers means there could be a lot of people who want but can’t buy an EV. They say, “The RAC Foundation has discovered that by the Government’s own reckoning electric vehicles won’t be available on the mass market until at least 2017, leaving millions of potential buyers frustrated.”

Commenting on the findings, the director of the RAC Foundation Professor Stephen Glaister had the following words:

  • “What the Government is in danger of doing is putting the cart before the horse. It is actively promoting the purchase of electric vehicles long before there is any chance of manufacturers making them widely available.”
  • “It has gone out of its way to encourage people to make green choices, yet these choices are not yet realistic.”
  • “Ministers’ thinking on green technology is all over the place. They talk of incentives of up to £5,000 for prospective buyers of electric cars from 2011. Yet at that stage there will be almost nothing in the showroom for people to purchase.”
  • “The RAC Foundation fully supports the introduction of green vehicles. But electric cars are not the short-term solution. What the Government should be doing is improving the road network and encouraging manufacturers to refine existing technology. That means increasing road capacity to cut congestion and CO2 emissions; focussing on producing leaner petrol and diesel engines; and making smaller and lighter cars.”
Here is the RAC press release:

Bikes Sales Outpace Cars and Trucks in 2009 Q1

May 27, 2009 at 10:56 pm

(Source: TreeHugger; HuffingtonPost & Bike Europe)

While news of the four-wheel variety remains bleak with news that GM is on the brinkof bankruptcy, news for the two wheel set is mostly good. In fact, more bicycles were bought in the first quarter of 2009 than cars and trucks. Dennis Markatos @ HuffingtonPost points out, the news isn’t all good. Overall, bicycle sales are down 30 percent for the year, but the good news is that bikes are outperforming cars. In total, around 2.6 million bicycles were sold, compared to less than 2.5 million cars and trucks.  That doesn’t mean all is well for the American bicycle market and it is hard to say that bicycle sales are unfazed by the recession.  In units the Americans imported 1.1 million bicycles less this year. Remarkably the average value increased by 37.2% in the same period. The average FOB value now stands at US$ 96.60 against US$ 70.41 in 2008.

But that percentage drop is slower than the35+% drop in sales for cars and trucks. Since nationwide gasoline prices are now rising above $2.40 per gallon at the pump, we may see another wave of US residents shifting to bicycles for their everyday trips. The large savings from riding a bike over short distances rather than driving can help consumer confidence and support economic recovery.

Dennis also points out that gas prices are on the rise, making it possible that the trend will continue for a while.

States roll out plans for ‘smarter’ roads

May 25, 2009 at 2:02 pm

(Source:  Stateline.org via Planetizen)

States are hoping to use federal stimulus money to add technological advancements to their streets and highways to create “smart” roads.

Not all the highway improvement projects states plan to pay for with federal stimulus money involve widening roads, fixing bridges or repaving highways. Nearly half the states plan to use some of their new funds to pay for high-tech gadgets that will reduce congestion, help the environment and create jobs quickly.

At least 22 states have told the federal government they want to make their roads “smarter” by installing traffic cameras, creating express toll lanes, improving traffic signals and alerting drivers about accidents or delays ahead, according to the National Conference of State Legislatures.Such projects are “quick, they can move forward very fast, they create jobs and they’re effective in the short and long term,” said Jaime Rall, an NCSL analyst.States are under the gun to tell the federal government how they plan to use $26.7 billion in federal stimulus money for transportation. They have until June 29 to commit half of that money to specific projects, so states are focusing on projects that can get started quickly.Three-quarters of the money committed by states so far will pave or re-pave roads. Some of the money can go to passenger and freight rail efforts, too.

The Obama administration announced earlier this week that another $1.5 billion in transportation stimulus money can be used for innovative road projects.But included in the mix already are dozens of efforts to use technology to make roads function better. The “smart road” improvements include signals for on-ramps in Colorado, new E-Z Pass toll booths to allow drivers to pay without stopping in Delaware and traffic lights connected to fiber optic cable to reduce bottlenecks in Utah.

Technology improvements, in particular, have a bigger bang for the buck for the economy, the federal government points out, because more of the money goes straight to workers’ salaries. Only 20 percent of material-intense projects such as laying roads or fixing bridges typically goes to payroll, according to a January analysis by the U.S. Department of Transportation. For technology upgrades, about 50 percent goes to paychecks.

One of the biggest projects on the drawing board is a $74 million undertaking to upgrade 72 miles of roadway on the I-95 corridor in and around Philadelphia. The thoroughfare, crucial for the nation’s fifth-largest city, handles 120,000 to 170,000 vehicles a day. Pennsylvania officials hope the three-stage project will help minimize traffic delays and reduce pollution.   Technicians at the King of Prussia hub work around the clock, looking out for accidents and delays. If a car pulls off to the side of the road with a flat tire, for example, technicians can dispatch a tow truck. Meanwhile, the electronic signs will tell drivers about upcoming congestion. The message boards also can alert motorists about construction and suggest alternate routes.
Click here to read the entire article.  Shown below is the NCSL brief on ARRA surface transportation provisions, which makes the case for ITS projects as innovative, cost-effective alternatives for ARRA highway infrastructure and grant funds.