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RESEARCH IMPLICATIONS OF NATIONAL TRANSPORTATION POLICY By JOHN W. BARNUM DEPUTY SECRETARY OF TRANSPORTATION Twice each year I have the pleasure of reviewing the various proposals for University Research Program contracts. And twice each year I advocate funding the program before a committee of Congress. I do not always come out with the amount of money that I seek when I go to the House and Senate appro- priations committees, but each year I do make a point of what I believe to be the importance of this entire program. A number of the people on the appro- priations committees, and I think with some justification, look upon it skeptically. Skeptically in the sense that they want to see how it is assisting the role of the federal government in transportation. They want to see how it helps the federal government, in turn, to assist all of the other elements of the transportation community perform their particular roles. A statistic that I used recently in talking to the Transportation Association of America about the importance of capital formation in the private sector is germane when you weigh the relative roles of the federal government and of the private sector. If you will look at the total investment made in transportation in the United States in the course of a year, you will find that the universe is about $300 billion. The most recent year for which we have complete statistics is 1974 and the total was $295.7 billion. Out of that total amount a very small percentage comes from the federal government itself -- some 3.8 percent. A larger, but still relatively small percentage, comes from state and local government -- about 7.7 percent. Viewed purely from an investment point of view, the transportation community is very much a private sector community. As one who has to participate in decisions on allocation of federal funds among the many transportation demands, I myself am also skeptical about the extent to which the federal government should be doing a particular task instead of private industry, or state or local government. Invariably, I apply such a test when a particular research program, or a proposed demonstration program is brought to us. I then ask, why does the private sector not step up to do this very kind of job? When we think of how the university research program fits into the total role of financing research and development and demonstration projects, we are always conscious of the fact that the federal government contribution in dollars
and in numbers of people is very small compared to the universe of people involved in transportation. It was with the hope that we could tap this other 90 per centum of the transportation community that we organized, and have over these years worked very hard at developing, a university research program. lI would urge you to continue to give it your kind attention. Let me now give you our perception of how some of the specifics of the university research program fit into the federal Transportation Department's total mission. We meet today to exchange views on how the skills, talents, and resources of the academic community can best be applied to some of the problems that now frustrate the efficiency of the great American transportation system. Specifi- cally I would like to consider the research implications of the national trans- portation policy that Transportation Secretary William T. Coleman, Jr., expressed to the Congress last fall. Some years ago the improvement of transportation was viewed primarily as a challenge to technological research-the building of a better vehicle or a faster airplane. Today the challenges are understood to be social and economic as well as purely technological. And they are thus particularly well suited to broadly based academic study. For the most part the physical changes we antici- pate in our transportation system will not be radical. Rather they will be in the nature of a series of evolutionary improvements. The U.S. transportation infrastructure is in place and operating, and by and large operating very well. And certainly we must live with what we have, but we can look for significant changes in terms of management and operating techniques. What we seek, there- fore, are better ways of using what we have. These better ways are sought in four important areas which are to be considered during the course of this workshop: economics, social and behavioral sciences, physical science and technology, and planning, implementation, and operations. How are these areas related to our recently published national transportation policy statement? The core of this policy is that a dynamic and efficient private sector shall continue to the maximum extent possible to provide the nation's trans- portation services. Again, as Secretary Coleman has noted, the nation's security and the well-being of our economy depend on efficient and dependable transportation services. And it is, therefore, a federal responsibility to assist the transportation elements that are suffering extreme economic hardship and are in danger of collapse. And it is also the federal role to put forth leadership and funds where there is neither sufficient economic justification nor impetus in the private sector to perform those roles. A major area in which university research assistance in the form of innovative thinking is needed is in transportation economics. The poor economic health of two of the major elements of our transportation system is notorious. Our railroads have been unable to generate sufficient profits to meet their capital requirements or sometimes even their maintenance needs. In the first 8
half of last year the Class I railroads of the United States showed a zero rate of return. There was a slight improvement in the second half, enabling them to finish the year with a miserable 1.34 percent rate of return. The airline industry is in many respects confronting a similar dilemma, lacking the profitability today to embark on any new programs for replacement aircraft. They do not have the need today because capacity requirements have been down -- but by the time the economic upturn brings on new demands, they will need to be going to the private sector for additional financing. And with the returns on investment that they have been generating over the years -- indeed last year they came in at about $100 million net loss for the major trunk lines -- it is going to take a major turnaround in airline economics to generate the kind of profitability that will bring the private sector back into financing the nation's air carriers. We are also disturbed by the seeming inability of rail passenger ser- vice to pay its own way. The federal government's annual contribution to Amtrak continues to be larger than the gross revenues from all the passengers. For every dollar that Amtrak passengers pay, the federal government pays $1.25. And the future role of Amtrak is not just an economic issue. It is, of course, a social question and it is an environmental question. It is also an energy question. But we do not yet have an adequate grasp of the extent to which the federal government should be involved in subsidizing intercity passenger ser- vice when private sector buses and air carriers can provide comparable service and public benefits. We are moving to reform many of the government's regulatory practices which we frankly believe have contributed to the financial difficulties of the railroads and the airlines. The recent Railroad Revitalization and Regulatory Reform Act takes a major step, both in providing funds for rehabilitating and reorganizing the railroads in the northeast and midwest into ConRail, and also for refurbishing the railroad properties across the nation. But perhaps more importantly in the long run, what that Act does is permit much greater flexi- bility in the management of railroads, permitting railroads for the first time in nearly 90 years to set rates competitively. We have also submitted to the Congress an Aviation Act and a Motor Carrier Reform Act with similar regulatory reform provisions, but they are meeting resistance from the entrenched industries who are satisfied, I am sorry to say, with the status quo. This is in part because they are concerned with the uncertainties of what a change might bring, but also because it is a relatively comfortable way in which to continue to do business. But it is not an economic way and they are increasingly aware of the fact that they are not in a position to generate the capital that is necessary if the private sector is to meet the 90-plus percent of the total involvement in national transpor- tation budgeting. These measures that we have been proposing will be helpful, but they may not be sufficient in themselves to bring our railroads and airlines to new
productivity and full prosperity. We need new approaches that will bring greater efficiencies, cut costs,and attract new business. Another aspect of national transportation policy is the commitment to provide transportation services that are consistent with other national goals, such as energy, environment, safety and consumer interests. I do not need to impress on this audience the urgency of the necessity to save energy. Our vulnerability to foreign oil interests grows by the month and the possibility of future petroleum price increases gives us concern for the future stability of our economy and of the transportation industry which is so reliant on energy. Energy conservation must become a national ethic, and although it is not particularly popular politically -- witness the unfortunate compromises in the recent Energy Act -- we who appreciate the problem should be mindful on every occasion to tell those Americans who are less knowledgeable just how serious a problem it is. I remember vividly when the issue first came up several years ago on the occasion of the Arab oil embargo. There are still many people in the Con- gress clamoring that there really was not an energy problem, that it was a great conspiracy on the part of the oil industry. And I thought Claude Brine- gar, who was Secretary of Transportation at the time, stated the dilemma very well. He said to one Senator who was railing against the conspiracy of the oil industry: "Senator, come down to the harbor at Long Beach with me and watch the tankers not come in." It is unfortunately a problem of proving a negative. But we who are aware of the implications of stringency in energy supply, the realities of seeking replacement for our energy resources, and the difficulty of educating people in energy conservation, have I think a particular mission to communicate to the American people -- the fact that this is a very serious problem. One of the areas in which we are going to be working here is efficiency of automobiles, particularly the family car, which of course accounts for so much of our total energy consumption in the course of a year. The growing consumer demand for fuel economy assures that the motivation for improved energy efficiencies will be where it belongs, with the manufacturers, but we are frankly disturbed by the recent spate of articles and, indeed, sales reports to the effect that even the consumer of the American automobile is less aware, or at least giving less concern, to this problem. There continues to be a role for research. One university research project has already postulated a new automobile transmission and flywheel system of considerable promise for gasoline mileage improvement. This is an area where physical science and technology are helping. In the interest of fuel conservation we are also looking to the more fuel efficient use of our total transportation system. Better overall planning is needed. Our waterways and freight trains with their potential for high fuel efficiency must be encouraged, but the case should not be overstated. There is nothing efficient about having a single locomotive pushing four boxcars up a 10
siding once a week when that same traffic can be moved -- from an energy efficiency point of view and from a total economic investment point of view -- more efficiently by some other mode. In our cities we must continue to encourage transit and in the suburbs the potential for paratransit vehicles such as jitneys and vans needs to be further expanded. When Secretary Coleman announced a $15 million grant to Miami for initial engineering work on the first phase of a transit system for that city recently, he noted that the transit improvements usually increase the value of land lying along the rights of way and he concluded that Miami, like other communities, can recapture some of that increased value to help support transit capital costs. That concept had been explored earlier in a university research project. Another university study which developed practical recommendations for forming and managing auto, van, and bus pools proved sound enough to be adopted by the transit authority operating in the city in which the university was located. These are excellent examples of innovative planning and implementation that incorporate a sound knowledge of system operations and economics. The demands of fuel conservation are challenging in themselves, but they take on added difficulty when we begin to blend them with the needs for environmental protection. Our motor vehicles must be made more fuel efficient. At the same time, we must take steps wherever we can to reduce the air emis- sions from automobile engines. These are not necessarily conflicting demands. I note that one university project developed a motor vehicle control system capable of reducing emissions and improving mileage through close regulation of the air-fuel ratio and spark timing. It is, perhaps, overly simplistic to say that automobile emissions and fuel efficiency are not conflicting demands. In many respects, of course, they are, and one of the most difficult debates in which I have ever participated in the federal government has been the attempt to balance the benefits from changes in the Clean Air Act and changes for fuel efficiency requirements mandated in the recent Energy Act. And it is something on which we in the federal government very much need advice and assistance, both in reaching decisions and in persuading the decision makers in Congress as to the proper result. I would urge those of you who are familiar with those issues to speak out if you see the resolution -- or non-resolution -- of those problems lead- ing us down the wrong path. Another environmental threat looms larger because of the petroleum shortage. If our domestic supplies continue to dwindle, we shall be importing larger and larger supplies of oil. We must, consequently, improve and enlarge our systems for preventing tanker accidents and we must sharpen our techniques for controlling and cleaning up oil spills. The Coast Guard is working on these needs and doing a commendable job. But given the danger to the Ll
environment that comes from oil slicks, we must continue seeking further improvements in our preventive techniques. Here again we invite your partici- pation. Aircraft noise is another critical environmental issue and its solution will require data and knowledge from many fields. The decision on whether or not to have our airline fleets retrofitted with quieter engines or sound absorb- ant materials, for example, requires a thoughtful weighing and a careful balancing of costs and benefits. In looking at this aircraft noise problem we found, I might add, that one university research study was particularly help- ful. It established a technique for measuring the specific increases in property value in land adjoining an airport that would result from specific reductions in aircraft noise. I would like to expand a bit more on the results of that study. Because it is very difficult, if not impossible, to quantify levels of annoyance to the public, some sort of proxy which could be measured was sought. Variations in real estate values as a function of aircraft noise levels seemed a reasonable approach. But although this was useful to us, I would stress that aircraft noise is perceived by whole people, not just by machines or by ears. The level of annoyance might be dependent as much on attitudes toward aircraft authorities as it is on actual measured sound levels. People problems abound in transportation. How, for example, will they, as consumers, accept new transit services or new technologies? What are their expectations vis-a-vis their transportation systems? Such questions always play an important role in decision making and yet we know very little about such matters. I look forward with great interest to the results of the panel on social and behavioral sciences. The problems of fuel conservation and environment and consumer pro- tection appear, because they are of recent origin, to take on an overriding urgency. They are not, however, any more pressing than the ever present need to improve transportation safety. This need for safety is present in all modes -- gas pipelines, motor vehicles, marine, railroads, and air carriers. We have been impressed in the field of highway safety, for example, with the significant drop in fatalities that has followed the lowering of the highway speed limit. But we would like to know how we can achieve wider observance of this law. We would be interested, too, in any studies that would help lessen the menace of the drunken driver. In aviation safety we welcome any increment of improvement, no matter how small. The safety goal for commercial air transportation must be one of near perfection. And railroad safety is another important area. The presence in freight cars of potentially dangerous or unstable chemicals, gases, and radioactive materials can turn a minor derailment or uncoupling of cars into a major holo- caust. The academic community is well equipped to assist us in ameliorating this danger. 12
These and other challenges we face in improving our transportation system are critical, and let us face it, they are difficult to resolve. We do, consequently, appreciate your assistance. For my part, I find confidence in the knowledge that we have assisting us staffs of skilled university researchers trained in the multiple disciplines of the hard and soft sciences. And as I look at those of you who have dedicated much of your lives to transportation or fields related to transportation, I would remind you that the future of trans- portation lies not just in the work that you yourself do, but in your ability to inspire in students who are working with you the importance of resolving transportation problems. It is only as each person in this room leaves behind him at the end of his or her career ten, twenty, or a hundred other people who have stepped up and are ready to solve the transportation problems of the future that, in fact, all of these problems will meet their master. I wish you well in your work and I look forward to the results of your deliberations. 13
