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Against a gas tax
David Roberts, Gristmill
Why taxes can't get us where we need to go on transportation
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... When gas and oil prices fall, there are always two reactions: first, great lamentations that alternative and renewable energy investments no longer make economic sense, and second, wishes (upon a star) that America had the political chutzpah to impose a new gas tax.

Despite its appeal in some quarters, the gas tax is not a good idea. It costs enormous political capital and pays insufficient returns. If one had to be done and someone were willing to sail through the political sh*tstorm to do it, it ought to be like Troy Schneider suggests here -- revenue neutral, paid for with a reduction in payroll taxes. It would be a tidy, self-contained program, sheltering the revenue from pork-hungry hands; it would produce more of what we want (work) and less of what we don't (pollution). It's a good tweak.

What it will not do is significantly reduce the greenhouse gas emissions of the transportation sector. No reasonable price signal, on carbon generally or gasoline specifically, will do that. The solution is not more virtuous behavior or slightly more fuel economy, but new infrastructure.

To achieve the atmospheric carbon targets scientists urge upon us with increasing dread, emissions from transportation need to drop exponentially, not logarithmically.

... Prices will push consumers to conserve, but that's almost beside the point. Cars and trucks aren't going to change in degree of fuel economy, via tweaks to wind resistance and fuel injection systems and commuting habits. They're going to change in kind. We'll soon find ourselves seeking the most rapid possible turnover of the fleet from gasoline vehicles to non-gasoline vehicles. Whether plug-in hybrids, biofuel vehicles, or hydrogen vehicles win out in the end (hint: it will be plug-ins), it will require new fueling infrastructure, either an enhanced electrical grid, biofuel stations, or hydrogen stations. We also need large-scale shifts to public transit and rail, more bike and pedestrian paths, and transit-oriented development.

In short, the changes we need in transportation are not something car companies or consumers can do on their own. What's needed is beyond new habits and new vehicles -- it's new infrastructure.
(12 November 2008)

How to Fix a Flat
Thomas L. Friedman, New York times
Last September, I was in a hotel room watching CNBC early one morning. They were interviewing Bob Nardelli, the C.E.O. of Chrysler, and he was explaining why the auto industry, at that time, needed $25 billion in loan guarantees. It wasn’t a bailout, he said. It was a way to enable the car companies to retool for innovation. I could not help but shout back at the TV screen: “We have to subsidize Detroit so that it will innovate? What business were you people in other than innovation?” If we give you another $25 billion, will you also do accounting?

How could these companies be so bad for so long? Clearly the combination of a very un-innovative business culture, visionless management and overly generous labor contracts explains a lot of it. It led to a situation whereby General Motors could make money only by selling big, gas-guzzling S.U.V.’s and trucks. Therefore, instead of focusing on making money by innovating around fuel efficiency, productivity and design, G.M. threw way too much energy into lobbying and maneuvering to protect its gas guzzlers.

... O.K., now that I have all that off my chest, what do we do? I am as terrified as anyone of the domino effect on industry and workers if G.M. were to collapse. But if we are going to use taxpayer money to rescue Detroit, then it should be done along the lines proposed in The Wall Street Journal on Monday by Paul Ingrassia, a former Detroit bureau chief for that paper.

“In return for any direct government aid,” he wrote, “the board and the management [of G.M.] should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver — someone hard-nosed and nonpolitical — should have broad power to revamp G.M. with a viable business plan and return it to a private operation as soon as possible. That will mean tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others and downsizing the company ... Giving G.M. a blank check — which the company and the United Auto Workers union badly want, and which Washington will be tempted to grant — would be an enormous mistake.”

I would add other conditions: Any car company that gets taxpayer money must demonstrate a plan for transforming every vehicle in its fleet to a hybrid-electric engine with flex-fuel capability, so its entire fleet can also run on next generation cellulosic ethanol.
(11 November 2008)
Related from Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers: Why the health of the auto industry matters to you.

Via Gristmill: Tom Friedman on The Daily Show (YouTube)

Gas Is Down, But Most Airfares Stay High (text and audio)
Tamara Keith, Morning Edition, NPR
... The costs of jet fuel and diesel have also declined. But many of the fuel surcharges that airlines passed on to customers to offset high prices have stuck around.

The U.S. airline industry estimates its expenses jump by $430 million every time the price of a barrel of crude oil increases by one dollar. So, this summer when fuel prices were through the roof, a surcharge seemed like a reasonable thing.

But then fuel prices dropped — and many airlines were still using the surcharges. Rick Seaney, CEO of the Web site Farecompare, described it as a PR headache.
(12 November 2008)

Mass-Transit Projects Fared Well at Polls
Christopher Conkey and Paul Glader, Wall Street Journal
U.S. voters approved billions of dollars for mass-transit projects, highlighting a growing desire to overhaul the nation's aging transportation systems.

The increasing political support for transportation investment comes as Democratic leaders in Congress are pushing for a second economic-stimulus bill that could include tens of billions of dollars in additional spending on infrastructure projects. It also signals a potential boon for companies that provide everything from locomotives to collision-avoidance technology.

Some 23 initiatives were approved nationwide last week that will inject $75 billion into transportation systems, according to the Center for Transportation Excellence, a nonpartisan research group that promotes mass-transit service. Among the winners: Nearly $10 billion in bonds to start building a high-speed rail network in California, and $18 billion to expand mass-transit service in the Seattle area. The vote on another measure, which would raise the sales tax in Santa Clara County, Calif., to fund an extension of Bay Area Rapid Transit service, remains too close to call...
(13 November 2008)