California's Legislative Analyst taking over Policy Making on the sly
Here's the core of the argument of the Legislative Analyst that the voters of the state of California were wrong when they voted for Proposition 1a in 2008:
Largely as a result of these federal deadlines and requirements, HSRA decided in December 2010 to begin the construction of the statewide system within the Central Valley. This decision by HSRA, however, represents a big gamble that additional monies will eventually become available from the federal government or other sources to connect the Central Valley line to other major urban areas of California. The authority acknowledges that operation of the Central Valley segment by itself is infeasible because the potential ridership of a high–speed rail line within that segment alone would be insufficient to operate the system without a substantial subsidy.
Here is the "analysis" of the cost of not pursuing an oil-independent corridor connecting the north and south of the State of California:
Seriously: the closest that the Legislative Analyst comes to recognizing the massive economic risk that California faces in terms of transport's oil dependence is the following steaming pile of shit:
Finally, some have argued that investing in high–speed rail infrastructure instead of other modes of transportation could lead to improved environmental outcomes, such as better air quality. This is because the proposed system will be electrically powered and not require fossil fuels the way most automobiles and aircraft currently do. However, other studies have suggested that the project may not realize such improved environmental outcomes, especially if levels of ridership were low to moderate.
"Other studies have suggested that the project may not realize such improved environmental outcomes". Seriously? "other studies suggest"?
We've seen a credible argument from the UK (pdf) that if the power is sourced from sufficiently dirty thermal power plants, and if the alternative transport capacity already exists so that we are comparing the emissions from HSR operation and construction combined with the road and air operating emissions alone. However, when looking at new transport capacity, and making an apples to apples, construction and operations on both sides, that study makes clear that even on dirty power, high speed rail beats both road and air in terms of emissions ...
... and (as the California Legislative Analyst ought to know) the California HSR is committed to sourcing its power requirements from new renewable power generating capacity.
And we know that the California Legislative Analyst knows that the comparison is construction to construction, operation to operation, since it notes just three paragraphs earlier:
For example, HSRA estimates that this project would alleviate the need to build 3,000 new lane–miles of freeway, and 5 airport runways and 90 new departure gates—at a cost of nearly $100 billion—that would otherwise be necessary to accommodate intrastate travel by 2030. This is because the state’s population is projected to grow steadily for decades and significant investment in transportation infrastructure is expected to be needed to accommodate travelers between Northern and Southern California. ... completed below ...
And we've seen bullshit from Reason, Cato, and Heritage that assume incredibly low share of the total transport market for the service level, completely out of line with actual observed behavior of US travelers when faced with similar Quality of Service choices. Of course, the authors of those reports are hired to write reports that conclude that whatever rail project being described is a boondoggle, so if they have to go beyond the boundaries of credibility to get there, well, at least the paycheck cleared.
You'd think that it must be something like the UK study being referred to, but the Legislative Analyst could well be referring to "conclusion in advance, arguments marshaled afterward" work, since it concludes the point about the $100b having to be spent to provide the same transport capacity with road and airport investment with:
In theory, if those travelers choose the high–speed rail system instead of other modes, the project could reduce the state’s overall infrastructure costs.
This is a classic Cato/Reason/Heritage rhetorical trick: when an argument is strong, backhand it by portraying it as "just a theory". However, there's no credible reason to believe those travelers won't choose to ride the system
All around the country, when passengers are offered more reliable rail services, ridership increases, when passengers are offered more frequent rail services, ridership increases, and when passengers are offered more rapid rail trips, ridership increases. Just like people around the world do.
So the alternative theory under which California travelers do not treat the reliability, frequency, and transit speed available from the California is that although Americans act like people around the world in terms of the choices they actually are presented with, there is an unobserved threshold, somehow coincidentally just between the quality services that have been made available and the Express High Speed Rail quality of service, where Americans suddenly stop acting like people around the world.
"Just a theory" is a deliberate rhetorical effort to suggest, "well, its kind of 50:50 whether or not it'll work that way." And its required in Cato/Reason/Heritage type "analyses" precisely where the explicit claim is easily debunked, so its necessary to suggest it without coming out and saying so.
Talking Around the Elephant in the Room
The Legislative Analyst is writing about risks. So how are we understand the Legislative Analyst completing ignoring the risk of oil price shocks in a state with a transport system heavily dependent on oil, when evaluating an oil-independent transport corridor between the first (LA-Long Beach-Santa Ana, 11.8m) and second (SF-Oakland, 3.2m) most populous urban areas in the state? A corridor that includes the fourth (San Jose, 1.5m), seventh (Fresno, 0.6m), and tenth (Bakersfield, 0.4m) largest urban areas in Stage One and the third (San Diego, 2.7m), fifth (Riverside-San Bernadino, 1.5m), and sixth (Sacramento, 1.4m) in Stage Two.
Clearly, there is some risk that the Legislative Analyst is downplaying. There's no way or me to know whether the risk of oil price shocks was deliberately omitted to justify avoiding the risk, or whether the Legislative Analyst simply overlooked the biggest risk that the California transport faces through a combination of incompetence and focusing on the policy argument that they were trying to make in risk analysis disguise ...
... but considering the basics of project risk analysis makes the risk that the Legislative Analyst was avoiding stand out like a red thumb.
When considering a project risk analysis, you've got two sides that you start with automatically: the risk of attempting to do the project and failing, and the risk of not attempting to do the project at all.
The Legislative Analyst report is written with one eye closed: their conclusion regarding the risk of not attempting to do the project at all is:
That is, they raise three of the four risk factors on the side of not attempting to do the project at all, ignoring the biggest and most obvious one, grossly misrepresenting one, and using a rhetorical trick to try to minimize the one that they are not able to talk away ... and then ignore them for the balance of the report.
To put it bluntly, in the Legislative Analyst's Report, the risk of not trying is so minimal it does not bear taking into account. That may be an alternate universe to the one we all live in, when a outbreak of expectation that oil prices are going up can on its own momentum push the price o gas to $4/gallon ... but its the universe the Legislative Analyst wishes us to imagine we inhabit.
Now, think about what living in that alternate universe would imply. With no risk of failing to try, it implies that it is very hard to justify taking on risks when trying to succeed. In that alternate universe, the most worthwhile projects are the ones that meet other goals as well. In that alternate universe, having an organization run the project that views risks in terms of the risk of failing to succeed would be a mistake.
Clearly, that it is indeed that alternate universe that the Legislative Analyst wishes us to believe we live in:
- The Legislative Analyst recommends sidelining the California HSR Authority and folding the project into Cal-Trans.
Following the Trail of Logical Contradictions
However, this inability or unwillingness to demonstrate basic competence in project risk analysis is just one symptom that appears that something is up. When we consider the logical contradictions in the arguments provided, it seems clear that the argument emerged to support the conclusion, rather than the conclusion emerging from the analysis.
When arguing that the State of California should try to get freedom to treat the Federal funding like a block grant, the Legislative Analyst simply ignores the result when Ohio, Wisconsin and Florida asked to do so, and argues that the effort is likely to succeed in California's case because:
California Offers a True High–Speed Rail Option. The federal administration has prioritized dedicated high–speed rail projects, or projects that result in trains running at speeds of over 110 mph and generally do not share tracks with freight rail. California’s project is currently the only federally funded high–speed rail system in the country. (Some federally funded “high–speed rail” projects in other states would incrementally improve existing passenger rail services, but none of these are dedicated high–speed rail projects.) For this reason, it is in both FRA’s and the state’s best interests that the project succeed.
And what is the Legislative Analyst asking for permission to do? Consider the examples of three "better uses of money":
Los Angeles–Anaheim. This highly travelled corridor includes commuter, freight, and intercity rail traffic, which could benefit greatly from corridor improvements along the alignment shared with the proposed high–speed rail system.
Of course, this is not a "true HSR segment", and so the argument would not apply.
San Francisco–San Jose. Similar to Los Angeles–Anaheim, capital projects in this heavily congested corridor could improve both rail and auto traffic. This segment currently hosts 86 commuter trains daily, and freight trains use it at night.
Of course, this is not a "true HSR segment", and so the argument would not apply.
San Jose–Merced. The state provides intercity rail service from Sacramento to Merced (and on to Bakersfield), and a separate rail service between Sacramento and San Jose. If the state chose the segment between San Jose and Merced for a high–speed rail project, the state would essentially “close the loop” and enable a significant increase in passenger rail mobility between the Central Valley and the Bay Area. This benefit from high–speed rail construction would result even if high–speed trains ultimately were never operated on the system.
This is a strong indication that there is something else going on than the expressed concern with th risk of not completing the project ~ this segment is supposedly a better use of funds than the Valley alignment, though it has always been projected to be more expensive than the funded Valley segment, and the fallback suggested here is a hypothetical Amtrak-California service, so if the project did not proceed, this would represent a greater "regret cost" than the Valley alignment
So this is what the Legislative Analyst is pushing for:
Putting a hold on the Central Valley segment, and asking the federal government for more flexibility to examine this and other alternatives more carefully, ...
... means, when the San Jose to Merced segment is set aside as being a "possibility" to divide and conquer politicians from the Valley by bidding for support from Merced area politicians for a segment that the balance of the report would reject even more strenuously than the Valley alignment ...
... freedom to build incremental improvements to commuter rail in Los Angeles and San Francisco, and to "maybe someday" build the actual HSR connection between the the Bay Area and the LA Basin.
The "time to study more carefully" is one of the oldest delaying tactics in the book ... and, after all, what is the point of asking for "time to study more carefully" in the middle of a report demonstrating an inability or unwillingness to engage in serious analysis?
The basic request in this report is to the freedom to change the policy that a majority of the 2008 California electorate voted for in 2008, to build a corridor connecting the Bay Area in North California and the LA Basin in Southern California.
This also helped explain a clear contradiction in terms of the proposed funding of the California HSR Authority itself. Just consider these two statements side by side, and I am sure you will spot it yourself:
We recommend that the Legislature reject the administration’s 2011–12 budget request for $185 million in funding for consultants to perform project management, public outreach, and other work to develop the project, and only appropriate at this time the $7 million in funding requested for state administration of the project by HSRA.
Before the passage of Proposition 1A, the HSRA maintained a staff of roughly seven positions and conducted oversight of a relatively small number of consultants developing the general approach for building the high–speed rail system. After the voters approved the bond funding for the project, the number of consultants working on its implementation increased significantly. At the time we prepared this analysis, the HSRA operated with a staff of approximately 19 filled positions and a team of consultants that is the equivalent of 604 positions. While HSRA is authorized to have a staff of 40, vacancies have persisted largely because of hiring freezes imposed in recent years in response to the state’s severe fiscal difficulties. If all of the authorized state positions were filled, the ratio of state employees to consultants would be 1 to 15. As things stand, with only 19 state workers actually in place, the ratio is 1 state employee for every 33 consultants.
This first is a recommendation, and the second is the analysis. Of course, the recommendation that follows from the analysis is that the CHSRA should be exempted from hiring freezes and should expand its paid staff to be able to perform more work in-house. You only get to the recommendation actually made if you add the premise that it does not matter that much if the work fails to get done. Which is only reasonable, if the target is to abandon the process of building the Express HSR part of the Express HSR system.
Everything else falls out from that:
- Why ignore the question of the risk of failing to pursue an HSR corridor connecting North and South? Because the policy change being pursued quite substantially increases that risk, so doing the Legislative Analysts job of giving competent risk analysis across the board would undermine this policy agenda of abandoning that as a policy goal.
- Why propose that the California HSR Authority be pushed to one side? Because the policy being proposed is to raid HSR funding to build other things, and an organization with its first priority being to complete the HSR system will be an obstacle to pursuing that policy while hypocritically pretending that an HSR system to connect North and South of the state is being pursued.
The Tragedy is that Somebody Needs to Do the Legislative Analyst's Job
Making policy decisions is not, of course, the job of the Legislative Analyst Office. The LAO's job is to consider who to implement policy in a cost effective and efficient manner.
And taking on a policy agenda clearly undermines the effectiveness of the LAO in terms of actually doing its job. Since it has to pretend that studying cost effectiveness and efficiency is what it is doing, and these conclusions "just happen to emerge" from doing that, in order to smuggle a policy agenda into its analysis, it has to perform a biased analysis.
Unlike a Bay Area or LA Basin state politician, the LAO cannot come out and say, "Screw You, Fresno, the actual Express HSR part of the "HSR system" goes through the Valley, and building it means less opportunity to raid HSR funding for commuter rail systems in LA and the Bay Area."
But to pursue their policy agenda, they definitely must screw Fresno over.
Once it was determined that the Central Coast route would cost far more than a Valley route, it would take an utter fool to run the HSR through the Valley and not serve Fresno and Bakersfield. LA to SF will be just under 3hrs, a travel time where rail is competitive with air, attracting around 40% of the existing air market, and similar amounts of ridership pulled from car travel and in travel that happens because of the newly available option. But Fresno to the Bay and LA is 1:24 and 1:20 ~ Bakersfield to the Bay and LA is 1:50 and 0:55, transit times where rail dominates air. And because of the much more limited existing transport options, the Valley gets much more economic benefit relative to existing transport options.
Indeed, there are Silicon Valley companies that have their front office and R&D in the Bay Area and their back office and production outside of California, who will have a strong incentive to locate their back office and production facilities in the Valley, because at present flying out of state is less trouble than driving to the Valley, and with the HSR system, taking the train to the Valley will be the least trouble of all.
While there is no reason to conclude that the policy agenda that seems to underlay this LAO report is a deliberate preference to say, "Screw You, Fresno" ... (unlike, for example, Dan Walters, who agreed with the LAO under a different Legislative Analyst a number of years ago that Merced did not deserve a University of California campus, and now is all in, in support of the anti-HSR LAO report) ...
... that is one more implication of abandoning the Express HSR part of the Express HSR system in pursuit of raiding the HSR funds in support of commuter rail projects in more populous parts of the state.
Even if it is necessary to ignore the existence of oil price shocks in order to bias an "analysis" to arrive at that conclusion.
Where to find more info and how to take action
Much more information and ongoing coverage of the pushback against the LAO's proposal to abandon the policy adopted by a majority of the California electorate in 2008, can be found at the California HSR Blog:
Someone living inside California who wants to pushback should write and call your state legislator.
What someone living outside of California can do is a trickier question. One thing you can do is to publicize the issue and to write The Racheal Maddow Show to ask them to cover this "risk analysis concern troll" attack on HSR and the way that it completely ignores the risk to the California transport and economy in general of oil price shocks.
Midnight Oil ~ Truganini