Kuwaiti Oil Minister reportedly says OPEC won’t increase production until prices hit $100/barrel

June 11, 2009 at 10:25 pm

(Source: Autoblog, Bloomberg & ThisDay)

America might get most of its oil from Canada, but the moves that Organisation of Petroleum Exporting Countries (OPEC) makes still reverberate here. Thus, a statement by the Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah to reporters yesterday probably won’t help decrease domestic gasoline prices any time soon. OPEC’s al-Sabah said that the organization will not consider increasing production until the price of a barrel of oil reaches $100.

Crude oil traded in New York has climbed almost 60 percent this year, after plunging more than $100 in five months at the end of 2008 as the global recession curbed demand for fuel.

Oil futures rose above $71 a barrel yesterday for the first time in seven months, and traded at $71.18 as of 9:14 a.m. on the New York Mercantile Exchange.

OPEC had in the wake of the record oil plunge noted that its revenue had been adversely affected, a development which prompted members countries to set back 35 of the 150 projects due to come on line in the next few years to expand supply. OPEC predicted stronger demand as it decided May 28 in Vienna to keep production quotas unchanged. OPEC agreed at three meetings last year that the 11 members with production quotas would reduce output by 4.2 million barrels a day.

OPEC Secretary General, Abdalla El-Badri , had stated that falling prices of crude oil would not only affect investments in both the upstream and downstream, but will delay future investments.
He raised fears that if the present situation does not change, it will lead to cancellation of future investments and automatically affect oil supply to the market.Following the recent price rally, OPEC at its May 28 meeting agreed to leave outputs at their present levels. Lead producer, Saudi Arabia had predicted that oil prices would likely rise to around $75 a barrel by the end of the year on the back of growing demand in Asia .

OPEC President, Angola ’s Oil Minister, Botelho de Vasconcelos had noted that oil should be between $70 and $75 a barrel to cover the costs of production.OPEC’s Director of Research, Hasan Qabazard , had at an Energy conference a fortnight ago expressed fears that oil prices could fall again because fundamentals were still weak.The OPEC scribe had noted that oil markets were still weak, pointing out that the current price “rally may be unsustainable in the short term because the “rally is driven by funds rather than fundamentals”.  However, United States investment bank, Goldman Sachs had stated that a potential economic rebound alongside production cuts by the OPEC could prop up price to $85 a barrel by the end of the year and $95 a barrel by the end of 2010.

TransportGooru Musing:

1.  The power of the cartel and its influence in manging the oil prices can only be countered with sustained investments world over in alternative fuel technologies such as electric vehicles ( like in US, Japan and Europe) and hydrogen technology (Norway has a solid lead here).

2.  The developing economies are going to have a tougher time in this round compared against the previous years, especially with the recession still showing its strong grip in many countries.  Especially, for China and India high oil prices can be crippling as they are battling to out of the recession.

3.  Speculative trading in the markets should be reined in (a very hard to execute.  Period.

4. Above all, the only real sense of control remaining for ordinary people against this oil mafia is to simply repeat what they did in 2008 – stop driving unless it is really, really necessary.  If there is a transit alternative, park the damn car and take the bus or train.   Try and find if you have a carpool option available in your city.  It might be ridiculous to think about this “shun your car” as an option here. But the secret lies in the “power of one” –  as an individual your contribution might be negligible but if done effectively in every community it can make a serious impact.

GAO says Plug-in Vehicles Offer Potential Benefits, but High Costs and Limited Information Could Hinder Integration into the Federal Fleet

June 11, 2009 at 5:32 pm

(Source: U.S. Government Accountability Office)

The U.S. transportation sector relies almost exclusively on oil; as a result, it causes about a third of the nation’s greenhouse gas emissions. Advanced technology vehicles powered by alternative fuels, such as electricity and ethanol, are one way to reduce oil consumption. The federal government set a goal for federal agencies to use plug-in hybrid electric vehicles–vehicles that run on both gasoline and batteries charged by connecting a plug into an electric power source–as they become available at a reasonable cost. This goal is on top of other requirements agencies must meet for conserving energy.

In response to a request, GAO examined the:

(1) potential benefits of plug-ins,

(2) factors affecting the availability of plug-ins, and

(3) challenges to incorporating plug-ins into the federal fleet. GAO reviewed literature on plug-ins, federal legislation, and agency policies and interviewed federal officials, experts, and industry stakeholders, including auto and battery manufacturers.

Increasing the use of plug-ins could result in environmental and other benefits, but realizing these benefits depends on several factors. Because plug-ins are powered at least in part by electricity, they could significantly reduce oil consumption and associated greenhouse gas emissions. For plug-ins to realize their full potential, electricity would need to be generated from lower-emission fuels such as nuclear and renewable energy rather than the fossil fuels–coal and natural gas–used most often to generate electricity today. However, new nuclear plants and renewable energy sources can be controversial and expensive. In addition, research suggests that for plug-ins to be cost-effective relative to gasoline vehicles the price of batteries must come down significantly and gasoline prices must be high relative to electricity.

Auto manufacturers plan to introduce a range of plug-in models over the next 6 years, but several factors could delay widespread availability and affect the extent to which consumers are willing to purchase plug-ins. For example, limited battery manufacturing, relatively low gasoline prices, and declining vehicle sales could delay availability and discourage consumers. Other factors may emerge over the longer term if the use of plug-ins increases, including managing the impact on the electrical grid (the network linking the generation, transmission, and distribution of electricity) and increasing consumer access to public charging infrastructure needed to charge the vehicles.

The federal government has supported plug-in-related research and initiated new programs to encourage manufacturing. Experts also identified options for providing additional federal support. To incorporate plug-ins into the federal fleet, agencies will face challenges related to cost, availability, planning, and federal requirements. Plug-ins are expected to have high upfront costs when they are first introduced. However, they could become comparable to gasoline vehicles over the life of ownership if certain factors change, such as a decrease in the cost of batteries and an increase in gasoline prices.

Agencies vary in the extent to which they use life-cycle costing when evaluating which vehicle to purchase. Agencies also may find that plug-ins are not available to them, especially when the vehicles are initially introduced because the number available to the government may be limited. In addition, agencies have not made plans to incorporate plug-ins due to uncertainties about vehicle cost, performance, and infrastructure needs.

Finally, agencies must meet a number of requirements covering energy use and vehicle acquisition–such as acquiring alternative fuel vehicles and reducing facility energy and petroleum consumption–but these sometimes conflict with one another. For example, plugging vehicles into federal facilities could reduce petroleum consumption but increase facility energy use. The federal government has not yet provided information to agencies on how to set priorities for these requirements or leverage different types of vehicles to do so. Without such information, agencies face challenges in making decisions about acquiring plug-ins that will meet the requirements, as well as maximize plug-ins’ potential benefits and minimize costs.

The recommendations are listed below:

  • To enable agencies to more effectively meet congressional requirements, the Secretary of Energy should, in consultation with Environmental Protection Agency (EPA), General Services Administration (GSA), Office of Management and Budget (OMB), and organizations representing federal fleet customers such as Interagency Committee for Alternative Fuels and Low-Emission Vehicles (INTERFUEL), Federal Fleet Policy Council (FEDFLEET), and the Motor Vehicle Executive Council, propose legislative changes that would resolve the conflicts and set priorities for the multiple requirements and goals with respect to reducing petroleum consumption, reducing emissions, managing costs, and acquiring advanced technology vehicles.
  • The Secretary of Energy should begin to develop guidance for when agencies consider acquiring plug-in vehicles, as well as guidance specifying the elements that agencies should include in their plans for acquiring the mix of vehicles that will best enable them to meet their requirements and goals. Such guidance might include assessing the need for installing charging infrastructure and identifying areas where improvements may be necessary, mapping current driving patterns, and determining the energy sources used to generate electricity in an area.
  • The Secretary of Energy should continue ongoing efforts to develop guidance for agencies on how electricity used to charge plug-ins should be measured and accounted for in meeting energy-reduction goals related to federal facilities and alternative fuel consumption. In doing so, the Secretary should determine whether changes to existing legislation will be needed to ensure there is no conflict between using electricity to charge vehicles and requirements to reduce the energy intensity of federal facilities, and advise Congress accordingly.
  • The Administrator of GSA should consider providing information to agencies regarding total cost of ownership or life-cycle cost for vehicles in the same class. For plug-in vehicles that are newly offered, the Administrator should provide guidance for how agencies should address uncertainties about the vehicles’ future performance in estimating the life-cycle costs of plug-ins, so agencies can make better-informed, consistent, and cost-effective decisions in acquiring vehicles.
  • Once plug-in hybrids and all-electrics become available to the federal government but are still in the early phases of commercialization, the Administrator of GSA should explore the possibility of arranging pass-through leases of plug-in vehicles directly from vehicle manufacturers or dealers–as is being done with DOD’s acquisition of neighborhood electric vehicles–if doing so proves to be a cost-effective means of reducing some of the risk agencies face associated with acquiring new technology.

Click here to read or download the entire report.

Breaking News: Swedish television reports Sweden car firm Koenigsegg to buy Saab

June 11, 2009 at 3:43 pm

(Source: The Jakarta Globe)

Swedish luxury sports car maker Koenigsegg will buy Saab Automobile from US giant General Motors with the backing of Norwegian investors, Swedish television reported on Thursday.

The buyers have signed a letter of intention to buy Saab, SVT said on its website, citing anonymous sources and naming Koenigsegg and added that the negotiations could last for months.

“We are getting close to a deal done, but there are some final steps to be taken,” a source close to the matter told AFP, but would not confirm the identity of the leading bidder.

Both Saab and its parent company GM declined comment. Saab was put up for sale by General Motors, which filed for bankruptcy after being brought to its knees by falling demand amid the world economic downturn.  Saab’s reorganisation process began separately in Swedish courts in February.

Koenigsegg, set up in 1994, produces just 20 of its deluxe sports cars a year and sells each one for more than a million euros (1.4 million dollars).

Saab’s sell-off drew a little closer on Thursday after Stockholm announced it had authorised the Swedish Debt Office, which acts as a public bank to the state, to discuss guaranteeing a 500-million-euro loan made to Saab by the European Investment Bank (EIB).

“We have always said that the debt office could start negotiations on guaranteeing the loan when Saab has a new owner,” state secretary for business Joran Hagglund said in a statement.

Media reports had also said Italy’s Fiat was keen on buying Saab, but observers say such a move is now unlikely because of Fiat’s failure to acquire GM’s other European brand Opel.

Opel and its sister marque, Vauxhall, share a lot of technology with Saab.  The Saab automaker — not to be confused with a Swedish defence company also called Saab — sold 93,000 cars worldwide in 2008, according to its website.

It owes 9.7 billion kronor (1.3 billion dollars, 924 million euros) to GM — its largest individual creditor — as well as 347 million kronor to the Swedish government. Other creditors are owed 647 million kronor.

Saab, the automaker, employs about 3,400 people in Sweden. Including suppliers, some 15,000 jobs in the country are believed to be at risk if the company were to disappear.

Click here to read the entire article.

Opting to take the train instead of driving for environmental reasons? Think twice about ‘green’ transport, say scientists

June 11, 2009 at 12:32 pm

(Source: AFP via Yahoo & Science Daily)

Image Courtesy: IOP - Energy consumption and GHG emissions per PKT (The vehicle operation components are shown with gray patterns. Other vehicle components are shown in shades of blue. Infrastructure components are shown in shades of red and orange. The fuel production component is shown in green. All components appear in the order they are shown in the legend.)

Do you worry a lot about the environment and do everything you can to reduce your carbon footprint? Are you the one who frets about  tailpipe emissions, greenhouse gases and climate change?

If yes,  you must be the one who prefers to take the train or the bus rather than a plane, and avoid using a car whenever you can, faithful to the belief that this inflicts less harm to the planet.

Well, there could be a nasty surprise in store for you, for taking public transport may not be as green as you automatically think, says a new US study published in Environmental Research Letters, a publication of Britain’s Institute of Physics.  Often unknown to the public, there are an array of hidden or displaced emissions that ramp up the simple “tailpipe” tally, which is based on how much carbon is spewed out by the fossil fuels used to make a trip. Environmental engineers Mikhail Chester and Arpad Horvath at theUniversity of California at Davis say that when these costs are included, a more complex and challenging picture emerges.

In some circumstances, for instance, it could be more eco-friendly to drive into a city — even in an SUV, the bete noire of green groups — rather than take a suburban train. It depends on seat occupancy and the underlying carbon cost of the mode of transport.

The pair give an example of how the use of oil, gas or coal to generate electricity to power trains can skew the picture.

Boston has a metro system with high energy efficiency. The trouble is, 82 percent of the energy to drive it comes from dirty fossil fuels.  By comparison, San Francisco‘s local railway is less energy-efficient than Boston’s. But it turns out to be rather greener, as only 49 percent of the electricity is derived from fossils.

The paper points out that the “tailpipe” quotient does not include emissions that come from building transport infrastructure — railways, airport terminals, roads and so on — nor the emissions that come from maintaining this infrastructure over its operational lifetime.

The researchers also touch on the effect of low passenger occupancy and show that we are naïve to automatically assume one form of transport is more environmentally friendly than another. They conclude from their calculations that a half-full Boston light railway is only as environmentally friendly, per kilometre traveled, as a midsize aircraft at 38 per cent occupancy.  From cataloguing the varied environmental costs the researchers come to some surprising conclusions. A comparison between light railways in both Boston and San Franciso show that despite Boston boasting a light railway with low operational energy use, their LRT is a far larger greenhouse gas (GHG) emitter because 82 per cent of the energy generated in Boston is fossil-fuel based, compared to only 49 per cent in San Francisco.

Total life-cycle energy inputs and GHG emissions contribute an additional 155 per cent for rail, 63 per cent for cars and buses, and 32 per cent for air systems over vehicle exhaust pipe operation.

So getting a complete view of the ultimate environmental cost of the type of transport, over its entire lifespan, should help decision-makers to make smarter investments.

For travelling distances up to, say, 1,000 kilometres (600 miles), “we can ask questions as to whether it’s better to invest in a long-distance railway, improving the air corridor or boosting car occupancy,” said Chester.  The calculations are based on US technology and lifestyles.

Click here to read the entire article.    Also, you can access the PDF version of the research paper here.

Journal reference:

  • Mikhail V Chester and Arpad Horvath. Environmental assessment of passenger transportation should include infrastructure and supply chainsEnvironmental Research Letters, 2009; 4 (024008) DOI: 10.1088/1748-9326/4/2/024008

F** This! – The Infrastructurist rolls out a brand new portal to fix America’s broken infrastructure

June 11, 2009 at 11:55 am

Image Courtesy: The Infrastructurist

(Source: The Infrastructurist)

Our friends at The Infrastructurist have come up with a clever way to fix the decaying infrastructure of the United States.  They have developed a portal F** This! where you, the Citizen & resident of the community, can become a guardian of public infrastructure.

The Infrastructurist says, “You can keep your city working smoothly. You can post pictures of busted crap–partially disassembled escalators in subway stations, cavernous potholes, permanently dark street lights–and trade snide and insightful comments with your wonderful new F** This! cyberfriends (why can’t your real life friends be this cool?). At the same time, while you’re busy enjoying yourself, we’ll see to it that the appropriate public officials get notified and the problem you identified gets dealt with. Or, if said officials prove useless in fixing the busted stuff, we’ll see to it that they endure at least some small measure of public humiliation. It’ll be fun!”

The website notes that F** This! is still in the early stages of development and sometime soon, the Infrastructruist will organize an official campaign and some neat features that will help bring your complaints to everyone’s attention (assuming, you know, they are deserving of it). At first, the focus will be on New York, but the plan is to expand to other US cities in coming weeks and months.

As suggested in the website, let us poke around and look at a few of the action items that are up there. Explore F** This!’s inner workings. Let them creators know what you think. And a protip: Even if you don’t live in New York, you can scoot the map around and find your town. So give that a try if you’re inclined. The tool that is at use here is from a company called See Click Fix, which I think is very smartly put together. How about you?

What a novel way to get stuff fixed around the country!

Ride of the Future? – ABC News Chief Washington Correspondent George Stephanopoulos Calls Coda EV the American Answer to Japanese Prius

June 10, 2009 at 7:20 pm

(Source: ABC News & Autobloggreen)

I had an opportunity to take a ride today in a new electric car that has perhaps one of the best shots at being the U.S. answer to Japan’s popular Toyota Prius.

Image Courtesy: Autobloggreen

Designed by Santa Monica, California-based Coda Automotive, the four-door sedan isn’t powered by gas. The electric battery can plug into any standard AC outlet.

Coda says a 40-mile commute takes about 2 hours to charge.

Right now, the car and it’s battery are manufactured in China. But the company has applied for tens of millions of dollars worth of stimulus funding through the Department of Energy to build an electric battery plant in a factory in Enfield, Connecticut to fuel it’s vehicles.

“The U.S. has zero,  absolutely no mass battery manufacturing in the United States.  So we’re going to China where they can mass produce the batteries to get these cars to market in the U.S. fast until we can get these produced here” said Kevin Czinger, president and CEO of Coda Automotive.

Coda plans to partner with aerospace battery designer Connecticut-based Yardney Technical Products to create and mass produce the first U.S. electric car battery.

The company says the plant could employ 600 people at first, and then possibly grow. Beginning next June, Coda plans to have the capacity to build 2,700 cars and 20,000 a year in 2011. By comparison, Toyota sold about 159,000second-generation Toyota Prius hybrid cars last year in the U.S.  The price tag? $45,000 — but buyers could receive a federal tax credit worth $7,500 and other state incentives that Coda says could drive the price down to $32,500.

Image Courtesy: Autobloggreen

Click here to see more hi-res pictures of the Coda sedan.

Details, Details, Details: A quick comparision of the House vs. Senate forms of “Cash for Clunkers” a.k.a Consumer Assistance to Recycle and Save (CARS Act) bill

June 10, 2009 at 3:21 pm

(Source: Associated Press, The Detroit News, Streetsblog & Jalopnik)

With the “Cash for Clunkers” bill successfully clearing the House floor, there is a lot of chatter about the fate of this bill in the Senate.   The auto industry and Michigan lawmakers are pushing for quick Senate action on this legislation to boost auto sales, after the House overwhelmingly passed the bill Tuesday.

But it remains unclear when Senate supporters may overcome the objections of Senate appropriators and a group of senators who say the House proposal doesn’t do enough to improve fuel efficiency on the nation’s highways.

The House approved its version Tuesday, 298-199, with substantial Republican support despite the opposition of House leaders including Minority Leader John Boehner and whip Eric Cantor.

Sens. Debbie Stabenow, D-Lansing, and Sam Brownback, R-Kan., introduced a nearly identical bill in the Senate, but had to withdraw an attempt to get a floor vote last week.

Opposition came from members of the Senate Appropriations Committee, which objected to funding provisions of the bill, and from senators who want tougher fuel economy requirements.

Sen. Diane Feinstein, D-Calif., introduced a competing proposal on Monday.   Feinstein’s proposal would require drivers to achieve a 25 percent fuel-efficiency increase before receiving a tax credit for ditching their clunkers. But Michigan Sen. Debbie Stabenow (D) is pushing for a trade-in tax credit that’s very similar to Sutton’s — truck owners would only have to increase their fuel efficiency by 2 miles per gallon to be eligible.  The requirements for car trade-ins aren’t much better under the Stabenow and Sutton plans, with a mere4 mpg increase in fuel economy triggering the $3,500 tax credit.  With Rep. Sutton’s plan winning the House approval this week, Stabenow’s Senate counterpart could potentially get a leg up over Feinstein’s.

While we await the Senate action, I put together a quick side by side comparision of the two bills  (data from Associated Press).

Data Courtesy: Associated Press

Also, our friends at Jalopnik have compiled an awesome visual that simplifies the rs details of this “Cash for Clunkealong” with some great analysis about the worthiness of the program for buyers.

First of all, operable vehicles are required and there aren’t many people driving around with vehicles worth less than $1,500. Many old crappy cars, in fact, can still demand up to $2,500 on the open market. This means you’re going to get, max, $2000 for your trade-in. The least valuable qualifying cars, of course, are actually the more efficient compact vehicles, which makes getting the necessary 10 MPG improvement unlikely.

The second problem, stemming from the first, is quantifying the number of people who actually drive around in cars worth less than $2,500 and can actually afford a new car. Our instinct tells us there aren’t many people. This means people taking advantage of the program will, typically, have to be excited by the prospect of saving $1,000 or $2,000. These people should already have been swayed by intense discounting from automakers in recent months.

Image Courtesy: Jalopnik

Click here to read the entire article.

“Greener Aviation” Technologies and Alternative Fuels Head AIAA List of Top 10 Emerging Aerospace Technologies

June 10, 2009 at 12:43 pm

(Source: Green Car Congress)

Image: via Apture

Off late, there is a big push within the Aviation industry towards a “greener future.”   More airlines are starting to test technologies and tweak approaches (such as use of biofuels) to attract the environmentally-conscious consumer. According to 700-page Stern Report on the economics of climate change, CO2 emissions from aviation are about 600-700 megatonnes per year, or about 2-3% of total global CO2 emissions.   Giovanni Bisignani, IATA’s Director General and CEO, in his State of the Industry address at the 65th IATA Annual General Meeting and World Air Transport Summit in Kuala Lumpur said the international airline industry is committed to achieving carbon-neutral growth by 2020.

Amdist all the buzz and fervor building up around the greening of aviation, the American Institute of Aeronautics and Astronautics (AIAA),  the world’s largest technical society dedicated to the global aerospace profession, with more than 35,000 individual members worldwide, and 90 corporate members, has released its first annual list of top emerging aerospace technologies.  Developed by AIAA’s Emerging Technologies Committee (ETC), the 2009 list comprises the following:

  1. “Greener Aviation” Technologies, including emission reduction and noise reduction technologies as usedin the Federal Aviation Administration’s Continuous Low Emissions, Energy and Noise (CLEEN) program, and the European Environmentally Friendly Engine (EFE) program and “Clean Sky” Joint Technology Initiative.
  2. Alternative Fuels, including biofuels, as promoted by the FAA’s Commercial Aviation Alternative Fuels Initiative (CAAFI), and the recent FAA grant to the X Prize Foundation to spur development of renewable aviation fuels and technologies.
  3. High Speed Flight Technologies, such as supersonic and hypersonic aerodynamics, sonic boom reduction technology, and thermal management aids.
  4. Efficient Propulsion Technologies, including open rotors and geared turbofans, such as those used in the European DREAM (valiDation Radical Engine Architecture systeMs) program.
  5. Active Flow Technologies, such as plasma actuators.
  6. Advanced Materials, such as nanotechnology and composites.
  7. Active Structures, such as shape memory alloys, morphing, and flapping.
  8. Health Management, such as monitoring, prognostics, and self-healing.
  9. Remote Sensing Technologies, including unmanned aerial vehicles and satellites such as those used inNASA’s Global Earth Observation System of Systems (GEOSS) program.
  10. Advanced Space Propulsion Technologies, including plasma-based propulsion such as the Variable Specific Impulse Magnetoplasma Rocket, and solar sail technologies.

AIAA’s list reflects the expertise of the members of the Emerging Technologies Committee, as well as the results of a specially commissioned study. The ETC is composed of three technical subcommittees: Aviation, Space, and Multidisciplinary and System Technologies.  ETC chair Dan Jensen stated, “The list provides guidance to AIAA for its institute development strategy, while helping shape the annual input AIAA provides to the United States Air Force Scientific Advisory Board. The technologies listed represent the aerospace technologies in which research and technology development is most active from a global perspective.”

Have interesting ideas for solving the traffic congestion problem? ITS Congestion Challenge gives $50,000 for the best idea

June 10, 2009 at 11:08 am

The Intelligent Transportation Society of America (ITS America), in partnership with IBM and Spencer Trask Collaborative Innovations (STCI), has launched a global challenge to identify innovative ideas for combating transportation congestion.

“The average metropolitan commuter in the U.S. spends nearly a full work week stuck in traffic each year, wasting precious time and fuel and impacting the environment, safety conditions on roads, and economic productivity to the tune of more than 1 percent of GDP,” said ITS America President and CEO Scott Belcher. “Allowing congestion to grind cities, suburbs and supply chains to a halt every morning and afternoon is unacceptable when we have innovative tools, technologies, and strategies available to manage our transportation systems and utilize our infrastructure more effectively.”

The ITS Congestion Challenge is a global competition to identify the best and most creative ideas to effectively reduce congestion and its impacts on the economy, environment, and quality of life.

The competition is open to entrepreneurs, commuters, transportation experts, researchers, universities, and citizens from all fields around the globe. All ideas will be reviewed discussed and rated by an open global community, to determine the best and most creative ideas to effectively solve the consequences of traffic congestion.

The winner will be announced during the 16th World Congress on Intelligent Transportation Systems in Stockholm, Sweden, September 21 – 25, 2009, and will receive a cash investment of $50,000 USD, as well as development and implementation support to pursue turning the ideas into real-world solutions.

More information is available on the competition including key attributes winning entries will be expected to incorporate. Participants will be able to post solutions, collaborate in an open community to improve solution entries, and ultimately vote for those solutions they believe best relieve the issues caused by congestion.

A (Temporary) End of Privatization? Politics and the Financial Crisis Slow the Drive to Privatize

June 9, 2009 at 10:44 pm

(Source: New York Times & Planetizen)

It was hailed as the solution to America’s infrastructure spending deficit, but the influx of private funds has come to halt along with the failure of banks and the huge investment from the Recovery Act. Plus, many schemes aroused taxpayers wrath.

“Privatization, the selling of public airports, bridges, roads and the like to private investors, looks like a boom that wasn’t.

What happened? The financial crisis, for starters. The easy money that Wall Street was counting on to finance its purchases has largely disappeared. Then the Obama administration unintentionally damped interest with its $787 billion economic stimulus package, a windfall that local governments are now racing to spend.

Now the deals are falling apart. In April, a much-anticipated $2.5 billion plan to privatize Midway Airport in Chicago collapsed after a group of investors was unable to obtain debt financing. The deal, which had been in the works for four years, was to have been the first in a Federal Aviation Administration project that would have allowed up to five major airports to move into private hands.

The biggest was the failure last fall of the largest deal proposed to date — a $12.8 billion lease of the Pennsylvania Turnpike. Postmortems into that failed effort show that privatization advocates vastly underestimated the political opposition the deal would stir up in the Pennsylvania legislature.

Late last month plans to privatize “Alligator Alley,” a 78-mile stretch of Florida highway that connects Fort Lauderdale with Naples, collapsed when no bidders showed up. The failure has had a ripple effect — in Mississippi, state officials have pushed back the bidding schedule for a new 12-mile toll road.

Then there is the $1.2 billion privatization of 36,000 parking meters in Chicago. In the five months since the deal took effect, widespread complaints about poor service and rising parking rates have created a political firestorm for the Chicago City Council. Public opposition was so strong that on Wednesday the council approved a delay in voting on any future asset sales.

Chicago public officials have called the work of the private operator, Chicago Parking Meters L.L.C., “simply unacceptable.” For its part, the operator has apologized and announced it would delay price increases at the meters.

Proponents of public-to-private asset sales point to the $1.8 billion lease of the 7.8-mile Chicago Skyway in 2004 and the $3.8 billion raised by Indiana through a 75-year lease of its toll road in 2006 as successful pioneering efforts.

In Indiana, the money went to pay for a 10-year highway infrastructure program, and Gov. Mitch Daniels was re-elected last year promoting the lease, despite bumper stickers that read “Keep the Toll Road, Lease Mitch.”

The stimulus money, as well as other infrastructure money promised by Congress, has provided temporary relief for cash-poor municipalities. But this situation will not last forever.

“They still have expenses, and revenues will not keep up,” Scott Pattison, executive director of the National Association of State Budget Officers, said of state and local governments. “Some states will have to look at asset sales and decide. Once we step back from this crisis mode, I think they will be looked at again.”

Click here to read the entire article.