Electrifying the Rails – a Peak Oil Silver BB?

Everyone agrees that there is no single technology, no single silver bullet to solve the challenges we face because of peak oil. However, across the bigger ditch in the US, a very relevant debate is brewing about a key technology plank in the response to peak oil – electrified rail.

This topic is particularly pertinent as New Zealand gets ready to reinvigorate its own rail network after decades of neglect during our love affair with the black gold. An article published on The Oil Drum this past week has helped ignite the debate Stateside, as Americans start to take peak oil seriously.

Meanwhile, the French are way ahead of us, with non-oil dependant transit networks already linking the country, primarily via electrified rail. Should the Straight of Hormuz close tomorrow due to some geopolitical drama, the French public will still have groceries and still be able to get around. Should oil hit $300/bbl or worse and stay there for a while or forever, the French will still have food in their supermarkets and they will still be able to take a holiday on the Riviera. Will we be as prepared?

The article puts the concept of an America unified by electrified rail into an economic, environmental and national defence perspective:

An as yet unpublished analysis by the Millennium Institute using their T21 model strongly implies that a combined policy of a maximum push for renewable energy with a maximum push for electrified transportation (railroads and Urban Rail) gives the largest GDP, the largest reduction in Greenhouse Gases and the Largest reduction in oil consumption over decade and longer time horizons,

The best Economic Policy is the best Environmental Policy and the best Energy Policy ! And such a policy combination also has extremely positive National Defense implications. With some justification it could also be called the best National Defense Policy as well.

Just two major policy initiatives, renewable energy and electrified rail (Urban & freight) address every major public policy conundrum. If pursued with extreme vigor, these two policies, combined, are better than every other examined alternative.

One interesting observation is the positive effects of these two policies were not simply additive but multiplicative. There is a subtle but strong synergy between these two policies for the economy, energy and the environment.

I think that KiwiRail should be seriously considering finishing the electrification of the Auckland to Wellington Line, which is currently over 1/3 electrified already, with plans and budgets to complete the Auckland end using the same specifications. We already have a plausible target of 90% renewables by 2025, way ahead of any American plan. Let’s get cracking on this no-brainer of a solution before the cost of oil goes sky high and the capital cost goes up with it!

62 Comments Posted

  1. bjchip Says:
    … 4 million inhabitants not regarded as livestock (except by government)

    Very good.

  2. Now I wonder why Toll has bailed out of Tranzrail and PacificBlue and bought a stevedoring company instead? Perchance has their multimodal ownership give them an insight into which mode(s) suffer the least from fuel price increases, especially in countries where most of the population lives on the coast and all the big cities have ports. Maybe they figure all you need in NZ is trucks and ships. Oz has actually has an inland that can’t be reached by ships so that’s where Toll’s trains go. Clever eh? Somebody should have told Cullen before he paid them heaps for something they’d discovered becomes increasingly worth less as oil gets more expensive.

  3. Hmm, serves me right for asking for an economic argument 🙂

    It seems to me that what you have given is merely economists’ definition of the term.

    I think we have a common conundrum where the specialist is arguing a specialised definition, a definition not shared by the general public.

    I thank you for defining the term for us, but it does not answer the much larger question of why the government should not invest in rail.

  4. “It strikes me from observing many right-wingers, that they merely define “a public good? from the basis “what we (the right) are willing to spend money on?. That was particularly obvious in the debate over tertiary education.

    I would like you to come up with a well-reasoned argument as to why you think rail is not a public good. A blanket unsupported assertion such as your one above is simply not good enough.”

    A public good is a good/service that is non-rival and non-excludable. A railway line is excludable (an owner can exclude others from using it), and it is also rivalrous (when a train is on that section of track, other trains cannot use it).

    This is different to a street light, which is a public good. By displaying a street light, I cannot exclude others from using it, and multiple people can use it at the same time.

  5. Owen McShane said “Rail is not a public good”

    Mr McShane would you like to explain how you came to that conclusion?

    It strikes me from observing many right-wingers, that they merely define “a public good” from the basis “what we (the right) are willing to spend money on”. That was particularly obvious in the debate over tertiary education.

    I would like you to come up with a well-reasoned argument as to why you think rail is not a public good. A blanket unsupported assertion such as your one above is simply not good enough.

  6. The actual problem is that from a MARKET perspective New Zealand is nothing at all except a source of raw materials. It can’t have any manufacturing or technology base because it has only 4 million inhabitants not regarded as livestock (except by government) and it is over a thousand nautical miles from everywhere.

    That means that if New Zealand is to be anything other than a source of talented people to help make Australia work smarter and raw materials it has no choice but to create an industrial and technological base that gives those talented people something to do and pays them for doing it. Even if it is (as it has to be) LESS efficient than letting them whiz off to Oz and ship products back here.

    That inefficiency will profoundly disturb business interests and bankers and the political parties who regard government intervention in the market as anathema… but it is inherent in the NZ position. No successful business can stay. The very things that make a business succeed are the things that drive it offshore.

    respectfully
    BJ

  7. bjchip I have to agree about Muldoon, everyone bags him but I think his think big ideas were all good. The problem about free market economics is the market is useless for planing long term. Wall street companies have a quarter to quarter vision, they look from one quarter to the next quarter, their is no long term vision and certainly no way to plan 20 years into the future.

    I love the idea of coming up with a 2025 plan for New Zealand and then seeing if we can get there.

    Instead what we get from everyone is let the markets sort it out or lets wait for some new technology.

    The problem with the above suggestions is that the market will continue to do what ever its doing and will be very resistant to change. Putting your faith in new technology is also a mistake you have to build tomorrow with today’s technology.

  8. Yeah… I never quite understood the motive for single tracking. It is so much cheaper to put in the two tracks when the crew is there and the bridges and tunnels are being built in the first place. Not quite as cheap as one of course, but this goes back to the other discussions about infrastructure and economics. Dual-Track is an investment that pays off over a time period best measured in centuries. Nobody can do that sort of estimation to make that sort of investment except government. I can make the estimation, but not the investment. The government can make the investment but the sort of estimation we’re discussing is beyond them. Muldoon “got it”. Nobody else here seems to think much of him but “think big” wasn’t wrong… it just wasn’t explained.

  9. Why are people still pushing Nuclear for NZ. We live in the roaring 40’s come on lets use that wind. We haven’t even gone off shore yet. Tidal, Wave, Wind.

    Of course don’t we have problems with our power distribution network.

    Also are we going to require 2 rail lines between Auckland and Wellington if we plan to put all our freight back onto trains.

  10. If we in NZ electrify our railway we will have to use oil/gas/coal fired stations to generate the power.

    Ah… so we aren’t going to build any windfarms, solar collectors, tidal generators, geothermal systems, wave generators, methane digestors or hydro?

    WE intend to do all those things and that’s what we’re planning to use to get power. There’s enough power in those things that we do not, as a country, require the use of Nuclear and that means we DO NOT become dependent on the Chinese for our power any more than we wish to remain dependent on the house of Saud.

    Maybe you’ve not noticed how difficult those “pebbles” are to actually make. We won’t be making them locally. We won’t be disposing of them locally. Maybe we can get them from Australia… IF the Aussies go that route, but Oz has solar power that hits the country like the hammer of god and collecting that power could give them energy independence as well. Without burning a single neutron.

    What is this OBSESSION with nuclear power? OK for some places and some things and using specific sorts of low waste reactions, but even that doesn’t make it the right answer for NZ in general. I’m atypical green in a lot of ways but I would not have a reactor anywhere near any volcanic hot spot… and I’d be looking for a solution that relies only on us and Australia… not on Chinese reactor and fuel production and availability which will have a waiting list of countries around the globe when it finally is ready for “mass production”.

    You figure out the economics so it actually works for a Thorium based accelerator driven reactor where we get the fuel from Oz and return it to Oz for burial. Tell me how much cheaper that is for the country than putting up wind turbines we not only can but DO build right here? Today?

    Pebble Bed isn’t a finished tech. Thorium accelerator driven reactions aren’t a finished tech. They aren’t production ready and so we CANNOT PLAN a system around them. The changes still to be made still can have drastic effects on the economic model.

    respectfully
    BJ

  11. Gerrit asked “While it is grand that we have all these plans for the trainset. Where will the funding come from.”

    Trevor Mallard answered that question on Agenda
    “I mean clearly very very heavy subsidy goes into roads, very uneven compared to rail and having something which is competitively neutral between the two I think will be the answer.”
    [Note that the only money spent on roads comes from road users and ratepayers. It’s a pity Espiner didn’t challenge Mallard on this point.]
    “…it may be for example that more of the transport funding which currently goes into roads will go into that area,…”

    Strip away the waffling and the answer to Gerrit’s question is the money will come from our petrol taxes and RUCs.

  12. roger nome, I couldn’t find the reference to Auckland-Christchurch freight transport efficiency in the New Zealand Transport Strategy discussion paper. What page is the comment on? I presume you’re referring to the PDF. I would like to see the source study because these relationships are very different from the ones calculated the US DoE. Rail and inland waterways equally efficient, combination trucks five times less efficient, rigid trucks five times less efficient than combination trucks. That latter point is crucial to multi-modal efficiency. Did the doc provide a range of comparison routes or just that one.

    Three important questions need to be answered before rail can be regarded as a silver anything.
    1) What proportion of tonne km is between points serviced by either rail or container shipping and thus transferable?
    2) What proportion of truck kms carry 1)?
    3) What proportion of truck fuel is used by 2)?

    If 1) is 50%, then 2) will be approx 33% {bigger trucks – bigger freight tonne kms] and 3) will be approx 25% {bigger trucks = less litres per tonne km}.

    Did the doc also mention time efficiency?

  13. Don’t forget that rail doesn’t need rubber tyres or roads. Those tyres are made using oil. Those roads are maintained using materials made from oil and using vehicles running on oil. As oil prices keep rising, electrified rail looks more and more attractive – even against shipping.

    Trevor.

  14. dbuckley Says:

    The French rail system working so well has nothing to do with nuclear power; if it were powered by steam engines it would work equally as well

    The overall measure of the success of the French railway system has a lot to do with their choice of nuclear power.

    You can only call their system a success if you ignore nuclear waste.

    If we in NZ electrify our railway we will have to use oil/gas/coal fired stations to generate the power.

    Is that what you want??.

    I don’t.

  15. The French rail system working so well has nothing to do with nuclear power; if it were powered by steam engines it would work equally as well, as that is the will of its operators, and its users and supporters.

    Nuclear is a bad foit for NZ, for reasons I’ve gone into enough times already.

  16. It is sad that you raise the French as an example. Their rail system works so well because they chose to go nuclear.

    We need to make completely different choices for a variety of reasons:
    1) We don’t want the long term problems of nuclear.
    2) We can’t afford nuclear.
    3) Our geography is different.
    4) Our population is low.
    5) Rail is really only efficient for freight that has to go a long way in one straight line. What does Wellington need from Auckland, and what does Auckland need from Wellington that has to travel faster than a boat?? Almost nothing.

    Buying the trainset and electrifying the rail would be a fun strategy if we were entering growth times. However, it is going to cost us a heap of money that should be targeted elsewhere given the downhill run that our economy will be on for a while.

  17. “We are already overly reliant on hydro-electricity, this is why we have power shortages in dry years. Future generation needs to focus on alternative sources of power to ensure diversity of supply.”

    Hence the usefulness of wind power – when the wind is blowing, you are not draining the dams.

  18. john-ston:
    We are already overly reliant on hydro-electricity, this is why we have power shortages in dry years. Future generation needs to focus on alternative sources of power to ensure diversity of supply.

    Geothermal is the most promising at the moment, and could run electric trains no problem. Harnessing the power of the ocean in novel ways (wave power, turbines in Cook Strait) might work too. Nuclear is an option to consider but I highly doubt the general public would be happy with it for the foreseeable future.

    Coal may be necessary for part of the supply if we can’t get enough renewables. I suspect the total carbon emissions from a train running on electricity from a coal fired power plant would be lower than a train running on diesel due to the greater efficiency of steam turbine technology as opposed to internal combustion engines, but would need to see some actual calculations.

  19. “Wind is hopeless for rail because it needs back up and it seems silly to pipe up power from the south island.”

    Well, Mr McShane, you know that we have a very good backup system in New Zealand – it is called hydroelectricity. We can get hydrodams going very quickly; it doesn’t take time like firing up a coal fired plant.

    “But the new generation of reactors are cost effective at much lower capacity and the pebble bed reactors would allow Auckland to have a couple of modules producing really cheap reliable power.”

    How many billions would this cost? The last time I checked, the cheapest nuclear plant cost in the region of a couple of billion – the only entity that would build such a thing is the Government.

  20. BP – here you go with the hyperbole again. It was $5 million for two website based programmes, (not just the websites), over several years. Can’t you guys read?

  21. >>making a lot of money from our SOEs that just means that we get to pay less in taxes for the same service, no?

    No.

    They think $15m on a website is a good spend. They just suck it up paying for inefficiency.

  22. First, it is quite true that rail is more efficient at hauling volume goods from Auckland to Christchurch. That is why the customers chose that service.
    But that is one of the few trips which are long enough to make rail the carrier of choice. And even then it gets tough if you are moving stuff from say Clevedon to Auckland to Christchurch and then to Rolleston.
    Why does more expensive fuel favour rail over trucks when over most journeys rail uses more fuel than a truck or even a family in their car?
    Anyhow if the rail is electrified and if that makes rail more competitive then more customers will switch to rail. But with present fuel prices a diesel rail system it likely to lose customer rather than gain them.
    An earlier poster says we cannot use nuclear power because the station and the backup would swamp demand. THIS WAS TRUE SOME YEARS BACK.
    But the new generation of reactors are cost effective at much lower capacity and the pebble bed reactors would allow Auckland to have a couple of modules producing really cheap reliable power. Wind is hopeless for rail because it needs back up and it seems silly to pipe up power from the south island.
    IF you really want electrified rail in NZ then you had better learn to love nuclear power.
    Of course the same power will drive any electrified rubber on road system so only competition on a level playing field will allow customers to make informed choices and allocate resources most efficiently.
    I must say I cannot understand the love of rail but accept it in the same as I accept that some people find Madonna attractive or enjoy dancing to head banging music.
    But if you do have these fetishes then please be prepared to pay the full price for them.

  23. Phillip John,

    I dont know how old you are but back in the 1960’s the rail charges and service was horrendous. Same situation as we have now. A monopoly.

    And freight had no alternative to rail. Those who remember the monoploy on the Cook Straight will am sure not remember it fondly (unless you were a cooks ans steward or sefarers union member).

    And governments handing tax back? Where have you been this last 9 years with Dr Cullen running huge surplusses. Ah, got a packet of chewing gum returned and then snatched back.

    The my in my last comment should have been a may.

    spelling error.

    That assumption on road freight restrictions is as valid. Even thought he government document does not say it it does not mean it MAY not happen.

    Not all of us believe everything a goverment department publishes.

    Plus everything is always flexable.

    Do you go with the idea of keeping OnTrack and KiwiRAil seperate and allowing competion on the steel roads?

  24. “Because without doing this we have a monopoly situation where the low cost may not be reflected in charges.”

    But if the government’s making a lot of money from our SOEs that just means that we get to pay less in taxes for the same service, no?

    In any case that’s unlikely to happen because the government has ambitious targets for increased rail use (people won’t use it if it’s too expensive).

    http://www.transport.govt.nz/update-of-the-new-zealand-transport-strategy-2/

    “To reinforce this monoploy the government my reintroduce road transport distance restrictions.”

    Hold on there. I don’t think that’s a valid assumption. No where in the government’s transport strategy is this mentioned. Why don’t you read the document I link to instead of pulling assumptions out of thin air?

  25. BJ,

    While the cost maybe cheap. does not mean that he charges will be cheap.

    KiwiRail and Ontrack are SOE’s that have to return a profit.

    You would need to do two things to make the charges as cheap as the cost plus minimul profit.

    1. Keep KiwiRail and OnTrack as seperate entities
    2. Introduce competion to allow other uses onto the OnTrack network.

    Because without doing this we have a monopoly situation where the low cost may not be reflected in charges.

    To reinforce this monoploy the government my reintroduce road transport distance restrictions.

    In 1977 the limitation on road haulage to distances less than 64 km (40miles) was extended to 150km. In 1983 the limitation on road use was removed altogether.. (not too long ago)

    On could see a return to those draconian rules if rail charges (due to competion from road transport were not sufficient to recover cost PLUS make a profit. The profit to be returned to the management team for reinvestment to improve the infastructure.
    2.

  26. Owen McShane:

    “American freight rail operations make a profit. Hardly any rail system in NZ is able to do so because the routes are not long enough and the volumes are not high enough.”

    That was true in the age of $10-$20 per barrel oil (1920-2002) , but now we’re in the age of $140 per barrel, and rapidly entering the age of $300 per barrel.

    In the age of $10-$20 per barrel oil, fuel was approximately 30% of operating costs for the average trucking company. With the move to $300 per barrel, your looking at 80% of operating costs, meaning that in many cases, the fuel efficiency of rail will make it the more profitable option. Toll was getting ready to scrap most of our rail lines, and as Jim Bolger pointed out on “Agenda” last Sunday, that would have been a step backward for our economy in an age of ever increasing energy costs..

  27. bjchip:
    “Electric freight between Wellington and Auckland would be ridiculously cheap if part of the project included improvements that get the line up to a reasonable standard of speed. That’s a qualitative difference that isn’t considered by the study.”

    No, the day-to-day running costs would be cheap. If you take into account the actual cost of the improvements that got it up to that standard, the economics mightn’t stack up as nicely. You have to actually do all the sums (I have no idea what the end result would be), rather than just assuming electricity is cheaper than diesel so lets just use electricity. I too suspect that electricity would be the cheapest long-term option, but the statement “ridiculously cheap” is a bit over the top.

  28. “Speaking of which, did anyone dig to the bottom of this assertion: http://libertyscott.blogspot.com/2008/05/abandon-railways.html

    Basically it compared the average energy cost per passenger, and for freight, and bizarrely trucks came out on top. Apparently based on MoT figures, too.”

    I don’t now how they came up with those figures. As I understand it may be true of some hilly, less travelled routes – but it doesn’t hold true in general.

    For instance, the latest New Zealand Transport Strategy discussion paper states that to move freight from Auckland to Christchurch it is 4 times more efficient to do it by train than truck, and four times more efficient again to do it by boat.

  29. Lets not worry about the rail in NZ once we have the next Great Depression there will be lots of out of work NZ’rs so we can build lots of rail roads.

  30. Something about the Soviet model that may have escaped you is that THEY don’t have to worry about the demise of the petrol automobile. They embraced rail because they had to move a lot of stuff a long long way in weather that can be a little bit more severe than our typical temperature ranges. Buying into the fallacy that the railroad must make a “profit” is something out of the dark side of the Capitalist Manifesto.

    It simply does not apply to EVERY situation. The non-monetary issues are only non-monetary because their benefits play out over generations rather than quarterly reports.

    Using a single measure of “goodness” which is money and profit over a comparatively short time is a good way to destroy things that are valuable to the society over a much longer term.

    It was tried with education. It was tried with National Parks. The Rail infrastructure in LA. The Rail infrastructure throughout the USA is in horrible condition for supporting the transitions that are being proposed.

    The question of what core societal functions are important enough for the society to decide that it WILL pay for them in spite of the appearance of short term inefficiencies is important. If you draw the line at “none” this country is condemned to bleed to death economically, is sentenced to social deterioration that will bewilder simple business models and economic measures.

    This is not about “are trains better than trucks” horses for courses” is the response to that and it is important to make provision for both.

    Electric freight between Wellington and Auckland would be ridiculously cheap if part of the project included improvements that get the line up to a reasonable standard of speed. That’s a qualitative difference that isn’t considered by the study.

    respectfully
    BJ

  31. Although the French train set is probably the model of where one can get to, a large chunk of mainland Europe (notably excluding the UK) has comparable train services. You can, quite literally, set your watch by the trains across much of Europe. The French double decker communter trains are quite remarkable.

    Many electric trains do have regenerative breaking, the more modern trains do, with the technology has been available since at least the seventies. Certainly the UK 25KV locomotives use regenerative breaking and have done so for decades.

    Dual voltage trains are not a big issue; yes, they cost more, but the extra equipment required does not occupy space to the exclusion of passengers. The UK “Thameslink” service (which I used on a daily basis for years) is one example, see this WikiPedia article. Changeover between supplies takes no more time that the train would be in the station ordinarily.

    And Owen: We’re not running an economy by using the Soviet model, we (in the royal sense) underpinning the economy by judicious use of common sense. Private corporations cant do that as they need to make profit or die, but countries can do that, to the benefit of both organisations and directly to people. If the private sector cant and/or wont do what the country needs, then a government – any government – is forced to act in the country’s best interest.

    New Zealand needs to defend itself as best it can against a world scenario of fuel prices that will continue to rise without forseeable end, and the train set for goods transport is at least an attempt at facing the future. I’m willing to give Helen a huge amount of lattitude in this one as she is at least doing something realistic and useful and that has a chance of suceeding.

    Speaking of Ruskies: lets look to the USA; it’s a good job the government has the ability to print money arbitrarily and redistribute it socialist-style, or the USA would right now be well in the toilet.

  32. If an operation does not make a profit sufficient to pay at least for the cost of capital then it is destroying wealth which means it is destroying savings – either private or public or both.
    The idea that you could run an economy on the basis of providing useful goods rather than by making profits was tried in the Great Soviet experiment. IT may have passed some of you by, but that experiment failed.
    American freight rail operations make a profit. Hardly any rail system in NZ is able to do so because the routes are not long enough and the volumes are not high enough.
    Roads “do not make a profit” because most roads are classic “public goods” as defined in any text on economics you care to read. The Lighthouse is also a classic public good. Rail is not a public good. Many roads can be run as private goods – they are called toll roads. Because most roads are public goods we pay for them in rather clumsy ways such as petrol taxes and registration fees and road user charges. But we certainly pay for them.
    However, new technology means that we may be able to turn all roads into private goods and run them at a profit. If both rail and rubber on road systems operate as private goods and making a profit then we shall have the best of both worlds because resources will be efficiently allocated and pricing will determine use. There may be a few externalities to deal with but they will easily be covered by the tax on the profits.

  33. Bryan, that is one of the weirdest bargaining positions i’ve ever heard – who is so in love with nuclear power that they’ll only support having a trainset if it is run (to whatever extent) on nuclear power? Either trains are worth having or not -once we figure that out, we can figure out how to run them, then decide if the total benefits outweigh the costs.

  34. “You’ll only support electric trains if they run on nukes? Odd.”

    Well you have to start a bargaining position from somewhere.

    Gerrit: I really enjoyed your comment above : “While it is grand that we have all these plans for the trainset….” I would love you to post it as a comment on a piece by Roger Kerr on The Great Train Folly here

  35. The costs would be huge, plus their is no way through the North Island its just too rugged. You would have to blast your way through a lot of mountain side.

  36. turnip: currently about 12 hours. How much would it cost to upgrade the network to the standard required to get that time down to 2 hours ? More than it’s worth no doubt.

  37. Nuclear makes sense for the French, it also makes sense for the Aussies, but it doesn’t make that much sense for us.

    I rode the eurostar from London to Paris a couple of months ago for business. All I can say is what a great system beats flying.

    Poor old NZ is too small to be able to fund the capital costs required to build a good railway system. How long does it take to get from Auckland to Wellington by train?

  38. “the French are way ahead of us,” remember the Rainbow Warrior ? I can’t believe Frog Blog are praising the “cheese eating surrender monkeys” !!!

    Seriously all those wonderful French electric trains are supplied energy from nuclear power stations. Now if the Greens agree to support nuclear power I will agree to support electric trains.

  39. While it is grand that we have all these plans for the trainset. Where will the funding come from.

    Exisiting tax cashflow, borrowing, infastructure bonds?

    I have two major reservations about the trainset.

    1. Bolger has made it clear that he sees the two current entities (track and the rolling stock) as a single unit.

    Meaning there will be no competition on the road made of steel (instead of tarseal). KiwiRail can charge what they like.

    We should instead keep the OnTrack and KiwiRail entities seperate and allow OnTrack to open up the rail network to other train set operators.

    As long as each operator abides by the “rules of the road” on the rail network, we can increase capacity and services to meet the consumers demands (freight and passengers).

    With just one operator it is a monopoly. Surely something the Greens would be dead against? We rally against a food duopoly yet encourage a rail monopoly.

    2. With increasing cost, the feight charge by road will go up.

    Lets say it is going to cost $600 per tonne to send goods by road Auckland to Christchurch. KiwiRail only has to be at $599 a tonne to get the business and force road transport off the roads. Yippe you might say, but the cost of transport has not come down (carbon emmisions might if electrified rail is operational).

    In fact as road charges for freight go up higher there is no incentive for KiwiRail (as a SOE) to maintain a cost plus mentality of a government department. It only need to be a $1 per tonne less then any future road charges. In fact when the road freight business collapses, it can charge what it likes. There will be no competion (even across Cook Straight where it only competitor Blue Bridge is owned by the road freight companies).

    Same for passenger transport. Whatever the bus company would charge, KiwiRail only needs to be a $1 less for the fare. And once the bus companies collapse its open slather for rail charges.

    Hence my thoughts that we need to keep OnTrack a sperate entitiy from KiwiRail.

    OnTrack then is left to do what it should be doing, open up old rail lines (Hamilton trhough Te Aroha to Thames for example), refurbish exisiting lines (Napier to Gisborne), upgrade the main trunk for faster trains, etc.

    With income derived from a better service provided by competing trainset operators.

    Otherwise we will see KiwiRail become what was NZR. A firm I joined from school as a civil engineering cadet and even then was a wasteful monopoly.

  40. Frog, You seem to be grossly overestimating your cousies preparedness. According to UNECE transport stats French rail carries 12% of domestic tonne km and 8% of passenger km. Local buses manage 4% and thats mostly short urban journeys.

    Finland does a bit better – 10% by bus, 5% by train and 20% of freight by rail. Austria manages 30% of freight by rail, on par with former soviet countries.

  41. mugwump, I has a quick look at the STCC but couldn’t find the figures LibertyScott quoted. However tables B12.4 & B12.5 do suggest that for long-distance freight the costs may be similar. Unfortunately the truck costs are in cents per vehicle km travelled whereas rail are in cents per gross tonne km. If the average long-distance truck has a gross weight of 40 tonnes the environmental costs are 10% better for road, but if it’s only 30 tonnes then they are 10% worse than rail. It’s in urban areas where trucks have really high environmental costs because of noise and air quality health impacts.

  42. Actually, does anyone know of any long distance electrification projects that were proposed in Australia in the 1970s/1980s. I am aware of the North Coast Line electrification in Queensland, the Central Coast Line electrification in New South Wales. Were there any others?

  43. The first thing that would need to be considered if we were to finish NIMT electrification is Wellington, and whether or not we should convert Wellington to 25kV AC or not. We could get dual voltage locomotives, but it would increase maintenance costs unnecessarily (more machinery), and we would get less horsepower for the size locomotives we can have, as we would need another voltage converter. The other thing is that it would limit the EFs to Auckland to Waikanae.

    Personally, I do believe that Auckland to Hamilton could be electrified on an economic basis. In 1994, there was a study that almost resulted in electrification of Auckland to Hamilton (it was only stopped when the signallers got involved and reminded everyone of the cost of protecting the signals). Palmerston North to Waikanae would be more difficult when you consider the option of whether or not to convert Wellington to 25kV AC should be explored or not.

    Other than the NIMT, the Hamilton to Tauranga part of the ECMT, the Otira Tunnel and possibly the Christchurch network, I cannot see any part of the New Zealand network that could be justifiably electrified. It would be far better to focus on expansion than spending billions on electrification projects that would have little benefit (even the NIMT electrification was marginal).

  44. One thing that I think would be a great idea would be for the overlander to have flatdeck rail cars onto which motorists can drive on at one end of the rail journey, and drive off at the other end, or at any of the stops in between.

  45. I can’t remember where I read it, but even if NZ and NZers could bring themselves to back nuclear power generation in NZ (plonk a power station downwind on the Chathams, with a 700km cable back to Chch :-p), there is the economic side to look at. NZ doesn’t have the population and power consumption to make building a nuclear facility economically viable. I just wish I could recall the study where I read these figures.

  46. Good to hear that. I didn’t say that state ownership of the rail system was wrong in principle, just that the price paid for it seems exorbitant. I think the future of transport is in electricity, and this sounds a great idea in theory, provided the numbers stack up.

    Well, I think that the price we paid for it is more a reflection on how ridiculous it is to sell key infrastructure and create monopolies that can run it down until the government buys them out than a reflection on any bad practice by the Labour Party. Given how much we were subsidising Toll and how many fits it was throwing over not getting even more cash off us, I’d say the buyout was pretty timely.

  47. Putting aside all the arguments about the need for efficient rail (why not) and efficient management thereof (of course) the unspoken gorilla in the room in terms of this discussion is the fact that France has an electrified rail system due in part to the fact that 80% of their electricity production is nuclear. The other 20% is roughly half and half/hydro/thermal. Without nuclear power they’d be using something far less efficient.

    If we accept that global warming is the effect that arises from the causes of thermal electricity generation and general burning of hydrocarbons, then the idea of nuclear power has to be discussed openly. It may or may not be the right thing for NZ but it’s hard to ignore it as a large part of the solution for developing countries like China, India etc.

  48. Hmm are links blocked? Sorry if this comes up twice.

    I was wondering if anyone dug to the bottom of the per-tonne efficiency stuff posted by Liberty Scott recently (2008-05).

    Basically it compared the average energy cost per passenger, and for freight, and bizarrely trucks came out on top. Apparently based on MoT figures, too.

    And does anyone know if hybrid-style engine braking happens with any of the electric trains currently? (ie, using the engine as a dynamo while braking, and returning the power either to the lines or storing in capacitors/batteries or even a flywheel).

  49. Speaking of which, did anyone dig to the bottom of this assertion: http://libertyscott.blogspot.com/2008/05/abandon-railways.html

    Basically it compared the average energy cost per passenger, and for freight, and bizarrely trucks came out on top. Apparently based on MoT figures, too.

    And does anyone know if hybrid-style engine braking happens with any of the electric trains currently? (ie, using the engine as a dynamo while braking, and returning the power either to the lines or storing in capacitors/batteries or even a flywheel).

  50. Good points dbuckley and Julie, I see where you are coming from a bit better now. I think we all want the rail network to have more money coming in (through charges and subsidies) than leaving, and all agree that the vast majority of this money should be invested in new rail infrastructure to increase the functionality and value of the asset. We are just using different terminology to describe the same thing.

  51. Great point dbukley.

    Mr. Dennis- I’d just like to add that there is no requirement for motorway infrastructure to return a profit, yet we continue to invest in their expansion. If rail breaks even overall (including investment in expansion, which is not the same as a profit which would go to shareholders as dividends in their investment) — then it is at least as economic and efficient as motorway infrastructure. (More because it reduces our Kyoto obligations…)

  52. Bering a government (ie us) owned thing, it doesn’t have to play by all the rules that normal businesses have to, especially as it is not in direct competition with a like supplier. Thus making a profit is not necessary, and as long as the thing delivers what the country needs of it, that is the most important factor. The railway has, over the next serious period of time, the ability to contain price rises in goods, and that is a goal worth persuing in its own right. Bring on the electrification.

    The scary fact if a SOE delivers a profit (as they tend to) then that profit isn’t actually a “profit”, it’s taxation. The profit that your electricity company makes on flogging you juice is the economic equivalent of a higher rate of GST on electricity…

    There is one point upon which you are absolutely correct: “The rail system needs to be run efficiently and economically“. The government industries of old failed to do this in a spectacular manner, and that is a mistake that must not be made again. In the same way that the Nats have to remember that dogmatic privatisation is not in a countries interest, Labour have to remember that jobs for the boys in the union is not in the countries interest either. The any normal world the way to do this is through competition, but in a limited marketplace it is a useless tool.

  53. dbuckley:
    I understand most businesses fail because they don’t make a profit, not because they do, although you may have a different understanding of economics to myself.

    The rail system needs to be run efficiently and economically. We must pay the full operating cost, and it must make a profit to finance further investment into improving the rail network – you can’t just maintain it at break even point or making a loss, as if it is losing money it will deteriorate and fail to serve the country well.

    The only real question is how much of the full operating cost we pay through charges to use the service and how much we pay through our tax.

  54. Mr Dennis: “t is their responsibility to ensure it is managed to make a profit

    NO! Thats how rail systems (globally) get screwed up. Theres now a couple of decades of experience that illustrates this. The rail system needs to be run well, to the benefit of the country, and then maybe it’ll return a profit, who knows.

    If all rail needs to do is make money then we can just repeat what we did last time; sell a good asset at a bargain price, allow to rot whilst skimming profits, repurchase whilst bending waay low, rescue with investment, get it going well, and then repeat the loop. Is this not manifestly crazy?

  55. frog:
    Good to hear that. I didn’t say that state ownership of the rail system was wrong in principle, just that the price paid for it seems exorbitant. I think the future of transport is in electricity, and this sounds a great idea in theory, provided the numbers stack up.

  56. Thanks idiot/savant! I couldn’t remember the exact fraction, but remembered it was reported in thirds so I went conservatively!

    Mr Dennis – We have made the suggestion publically, or rather Jeanette has done so, by putting a research project into the NZEECS – the NZ Energy Efficiency and Conservation Strategy, to investigate the cost effectiveness of electrifying the remainder of the Akl-Wgtn Line. Let’s get the Nats to do it! I’m sure Bolger will look at doing it anyway. As for your statement that buying the rail was a waste of money, I couldn’t disagree more! It was long overdue, or rather should never have been sold in the first place. Natural monopolies should either be state owned or heavily regulated. In this case we’ve had neither for decades.

  57. I think that KiwiRail should be seriously considering finishing the electrification of the Auckland to Wellington Line, which is currently over 1/3 electrified already

    Two thirds. The gaps are Auckland – Hamilton and Longburn – Paraparaumu, with the Wellington line soon to be extended to Waikanae. they’re going to need that, since with high petrol prices, commuting from Wellington’s exurbs by car simply looks like madness.

  58. This is an option that National could look at as they figure out how to manage this asset. They have already pointed out that now that so much taxpayers money has be thrown away buying it, it is their responsibility to ensure it is managed to make a profit. If this could reduce fuel bills for a reasonable cost and increase the value of the asset it may be worth pursuing, but their accountants would be the best people to figure this out. Just make sure you pass the suggestion on to them.

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