Today’s Wall Street Journal is touting a multi-billion dollar investment spree by United States railroads — the biggest in literally a century — as the dawn of a new railroad era. And much of the activity, the Journal notes, is taking place in Virginia. Indeed, a map on the WSJ front page suggests that Virginia, along with Alabama and Texas, stands at the epicenter of the railroad revolution.
The last major railroad investment binge took place before World War II. Railroads stagnated between the two world wars, then lost massive market share to trucks after the war, thanks in large part to the construction of the Interstate highway. For decades, railroads consolidated, downsized, shrank routes and abandoned tracks. But since 2000, railroads have spent $10 billion to expand their tracks, and they have $12 billion more in upgrades planned.
The WSJ quotes Norfolk Southern CEO Charles “Wick” Moorman IV: “The railroad industry is finally making some money. And we’re pumping that money into our infrastructure.”
Railroads are getting a political boost from an unexpected source: environmentalists who see rail transport as more energy efficient than truck transport. Norfolk Southern has adopted their arguments as justification for government support. Reports the Journal:
Norfolk Southern is seeking public funding to accelerate rail-corridor projects, arguing that they provide a public benefit by limiting fuel use, traffic congestion and air pollution. The idea is gaining backers.
One of those backers is Virginia. The WSJ highlights Norfolk Southern’s upgrade of the “Heartland Corridor,” which runs from Hampton Roads through Virginia to the Midwest, and the Crescent Corridor, which runs from New York City through Virginia to New Orleans. Trucks made four million to 4.5 million trips annually along Interstate 81 on the Crescent Corridor. Norfolk Southern envisions a route with enough speed and capacity to displace about one million truck trips a year — and it wants $2 billion to do it.
I applaud the revitalization of the railroad industry. And I totally agree that railroads are well positioned to capture container traffic from trucks, reducing traffic congestion, fuel consumption and air pollution. Here’s the question: Should government, whether the federal government or the states, help pay for something that it may be in Norfolk Southern’s best interest to do on its own?
Normally, I support a strict-user pays approach to transportation. However, I’m open to the idea (not fully persuaded, mind you, just open) that public support for Norfolk Southern could be justified if it offers the Virginia Department of Transportation a superior Return on Investment of its limited transportation dollars — i.e. more vehicles off the road, more congestion relieved, less gasoline consumption, less air pollution.
(Map credit: Adapted from the Wall Street Journal.)
