NOT RAILROAD AWARE? When Senator Obama introduced Senator Biden as his vice-presidential pick, he praised Senator Biden for his regular "lonely train ride" from Washington, D.C. to Wilmington, Delaware. That's as lonely as an Acela Express can be. (I'm surmising that the senator uses the Acela Express, probably in First at the urging of his protection detail.) Acela Express timings Washington - Wilmington are 72 minutes to 77 minutes, depending on whether that train stops at New Carrollton (Capital Beltway) and on the presence of commuter trains. That's not a bad commute: your Boston techie with a place in Grafton or your Chicago option trader from Geneva has more minutes on the train, as does your New York Master of the Universe riding the by-subscription parlor car to the Hamptons.

That, however, is not the supposedly rail-friendly nominee-to-be's most egregious mischaracterization of the railroads. Credit there goes to an observation about China that Riehl World View has pounced on.

Their ports, their train systems, their airports are vastly superior to us now, which means if you are a corporation deciding where to do business you’re starting to think, “Beijing looks like a pretty good option."

Yes, China is installing high-speed rail from Pekin to the coast, but for business logistics, that might not be determinative. This is the China that, to save money, equipped its new Jingpeng Pass route with steam locomotives (keep scrolling) cascaded from other lines. A few of those steam locomotives have since found new homes to raise railroad awareness in the U.S. And yes, China has recently built a mountain-climbing railroad into Tibet (keep scrolling). That railroad uses General Electric diesels, built in Erie, Pennsylvania, where the manufacturer has lots of expertise providing power to lift far more tonnage over Horseshoe Curve or Sherman Hill or Cajon Pass or Marias Pass.

WE LOSE MORE FREIGHT THAN THEY HAUL. That title is inspired by a snark a Pennsylvania Railroad crewman had about the Baltimore and Ohio. It seems like a logical way to expand on a David Foster post of a few months ago that lays some smack on a questionable comparison.

In 2005, Americans spent about $10 billion on women’s intimate apparel. During the period 2001-2006, China spent $4 billion building the 710-mile rail line from Golmud to Lhasa.

Please.

There are four major U.S. railroads: CSX, Norfolk Southern, Burlington Northern, and Union Pacific. These are all public companies, and from the cash flow statements (last 4 quarters) a total capital expenditure of about $7 billion may be derived. This is for a single year, whereas the Tibetan railway capex extended over a period of 5 years. (The US numbers include locomotives and cars as well as track improvements; I’m not sure exactly what is encompassed in the Chinese number.) And there are indeed some substantial capital projects being undertaken by US rails–read here about main line double-tracking being carried out by both BNI and UNP.

There are certainly reasons to be concerned about the level of infrastructure investment in the U.S., including railroad infrastructure. I think substantial additional investments will be needed in order to cope with expanded rail traffic, which is being driven by many factors (one example here.) But the numbers suggest that rail investment in America is, at the present time, by no means insignificant.

The latest projected capital spending figures suggest the railroads could buy a lot of scanties.

"The nation's major freight railroads invested a record $8.6 billion in 2006 and will break that record in 2007 with a $9.4 billion investment," Edward R. Hamberger, president and CEO of the Association of American Railroads, said in a prepared statement submitted to the STB. Capital spending has risen almost 60 percent over just the last four years. "The massive investments railroads must make in their systems are a reflection of the extreme capital intensity of railroads," he added.

Over the past 10 years, railroads have spent an average of 17.2 percent of revenues on capital expenditures, compared with an average of 3.4 percent for manufacturing, putting railroads at or near the top among all U.S. industries in terms of capital intensity.

The problem the railroads face is attracting sufficient capital to provide the capacity the shippers would like to use.

I suspect that Burlington (to use the archaic locution) spent more on big GEs for its system than China Rail spent on big GEs to run at those high elevations. First, background on the new Chinese line to Lhasa.

The new portion of the 1,220-mile route from Beijing to the Tibetan capital of Lhasa is indeed the highest in the world. Riding the new 710-mile section. from Xining, capital of Qinghjai province, southwest toward Lhasa, takes one through 16,500-foot-elevation passes at speeds up to 60 mph.

It is quite an engineering accomplishment, although one wonders whether any critics of the occupation of Tibet are free in China to contemplate the imperialist significance of the project. Western readers labor under no such constraints.

Tibetans loyal to the exiled Dalai Lama and other critics say the $4.2 billion railway is part of a campaign by Beijing to crush Tibetan culture by encouraging an influx of Han Chinese, China's majority ethnic group. Plus, environmental groups worry about the railway's impact on the Tibetan highlands.

The project, in a small way, contributed to reducing the current account deficit the U.S. runs with China.

Diesel-electric locomotives built by General Electric - an order for 78 units designated C38AC-he and rated at 4,000 h.p. each - power the trains in multiple sets of three or four.

I suspect that refers only to the power assigned to the most mountainous part of the line. Unless it's very lightly trafficked, a 700 mile railroad will use more than 78 diesels.

Next, comparison. The Trains Top Railroad Story of 2006 is improvements on the BNSF Transcontinental.

Throughout the year, BNSF continued work on double-tracking its "franchise" Chicago-Los Angeles route, known as "the Transcon," the former Santa Fe main line. It's the shortest route between the busy southern California ports and Chicago. Not only is BNSF working to double-track the last few single-track bottlenecks, between Kansas and New Mexico, it is planning ahead and acquiring land to triple-track much of the line, and already is moving to add a third track over California's Cajon Pass. BNSF is one of the few railroads taking a long-term approach to being ready for more traffic when it comes.

That's considerably more than 710 miles of track being expanded. It's also not the only expansion of capacity in the Southwest.

Union Pacific says its multi-year project to double-track the busy 760-mile Sunset Route between West Colton, Calif., and El Paso, Texas, reached the halfway mark at the end of 2006. Predecessor Southern Pacific began the project, which UP continued after the 1996 merger. Early work extended from the Port of Long Beach to Garnett, Calif., and most of the line from Tucson to El Paso now is double track. The line sees an average of 50 trains per day.

Work has accelerated in the last two and a half years, with 136 miles of new concrete-tie track constructed adjacent to the existing main line between Strauss and Mondel, N.M. More than 15 new control points have been installed, and 22 setout tracks have been added.

Yesterday, word reached Cold Spring Shops of a major locomotive purchase by CNR.

CN announced today it will acquire 65 new locomotives in 2007 and 2008, in addition to 65 locomotives already on order for delivery this year. The latest orders are for 40 ES44DCs from General Electric and 25 SD70M-2s from Electro-Motive Diesel Inc. The GE units will be delivered between December 2007 and February 2008, with the EMDs arriving in August 2008.

CN previously ordered 50 SD70M-2s for delivery between August and October 2007, and 15 ES44DC units to come in November of this year. This latest order will permit CN to retire 145 older locomotives.

The 65 locomotives CN previously ordered for delivery this year will be largely used to accommodate growth in traffic from the new Port of Prince Rupert container terminal, scheduled to start operations this October. All 130 new locomotives will be equipped with distributed power capability.

I don't know if the diesels on the Lhasa route are set up for distributed power (it can be useful on the mountains, although a crew in the pusher is useful for safety at those altitudes.) I also doubt that all of that new container traffic is billed to Victoria's Secret.

NOW IS NOT THE TIME FOR EMERGENCY POWERS.

I suspect that most of the time Thom Hartmann would trot out the list of industries the national government has effectively nationalized as examples of socializing the losses, and bad policy.

In the 1970s, in the wake of the collapse of the Penn Central Railroad, President Richard Nixon oversaw the voluntary nationalization and transfer of 20 railroads into the newly created National Rail Passenger Corporation, now known as Amtrak.

In 1974 Congress created another nationalized entity to deal with freight rail, the Consolidated Rail Corporation (Conrail), which absorbed dozens of failing rail companies. Conrail was government held until 1987, when it was privatized in the then-largest IPO in American history.

In 1984, when the Continental Illinois National Bank and Trust Company was in a crisis, President Ronald Reagan’s administration oversaw the FDIC nationalizing it by acquiring an 80 percent ownership share in the company; it wasn’t re-privatized until 1991, and was bought by Bank of America in 1994.

Also in the 1980s, after Reagan recklessly deregulated the Savings & Loan industry, bankers made off with billions leaving the wreckage of crushed S&Ls all across the nation.

When the government agency that insured them, FSLIC, went bankrupt itself in 1987, Reagan and Congress created an umbrella agency — the Resolution Trust Corporation (RTC) — to nationalize 747 of America’s S&Ls with assets of over $400 billion. Their assets were sold back into the private market in 1995 as the RTC shut itself down, having averted a 1929-style banking crisis through temporary nationalization.

When George W. Bush was handed the White House by five Republican appointees on the Supreme Court, the nation’s airline security system was entirely in private hands.

They failed miserably on 9/11, so Bush didn’t even bother with the normal acquisition process that would protect the hundreds of small contractors running security at airports across the nation: he simply nationalized the entire system and created a government agency, the Transportation Security Administration (TSA) to take over airport and airline security.

President Bush also partially nationalized the nation’s airlines, creating the Air Transportation Stabilization Board that traded around $10 billion in loans to airlines in crisis (air traffic collapsed after 9/11) in exchange for company stock.

Those are the recent examples. The wartime examples from earlier in the twentieth century aren't any more encouraging.  It gets longer from here ...