Statement of
Jeffrey N. Shane
Under Secretary of Transportation for Policy
Before the
Committee on Transportation and Infrastructure
Subcommittee on Highways and Transit
U.S. House of Representatives
January 24, 2007
The Surface Transportation System: Challenges for the Future
Mr. Chairman, Ranking Member Duncan, and Members of the Subcommittee:
Thank you for the opportunity to testify before you today on the Surface Transportation System: Challenges for the Future.
You have asked us, in preparing for this hearing, to take the long view, and to look ahead 50 years to examine what kind of economy we will have in 50 years, and what kind of surface transportation system we will need to serve that economy. Our analysis of this long-term prospect is not yet complete, but enough of the work has been completed for us to see the broad outlines of the task that lies before us.
Over the next 50 years, we expect the U.S. population to rise by over 60 percent, and for the Gross Domestic Product (GDP) to quadruple. As our population grows, and as incomes rise, the demand for transportation will grow accordingly. When people have more money, they want to buy more goods, which need to be transported, and they want to travel more. So we expect the demand for both freight and passenger transportation to increase by about two-and-a-half times over the next 50 years.
There are likely to be shifts in the kinds of transportation demands that we will face. It is no secret that the economy is becoming increasingly dependent upon global sources of supplies, but exports have grown as well. Since 1970, exports as a percentage of GDP have almost doubled, and imports have tripled. Moreover, the U.S. manufacturing base is increasingly shifting to high-value, high-tech products like pharmaceuticals and instruments, in which we retain a comparative advantage. These high-value products require an expedited transportation system that relies increasingly on overnight truck and air freight delivery. Our increasing reliance on imports of lower-value manufactured goods (and parts for domestic manufacturers) places a growing reliance on key ports of entry, such as the San Pedro Bay ports of Los Angeles and Long Beach, and the Puget Sound ports of Seattle and Tacoma. Landside connections to these ports, linked to an efficient domestic intermodal rail and truck freight transportation system, will be important to keeping the delivery costs of these commodities low. Overall, the shift in GDP from goods production to services production will cause freight vehicle-miles traveled (VMT) to grow more slowly than GDP, but the growth will still be large.
On the passenger side, the growing globalization of the world economy will result in increasing demand for international air travel as business people fly abroad to conduct international business relationships, and as international leisure travel increases. That in turn will increase the demand for land-side connections at our key international airport hubs. An aging population will increasingly challenge our transportation system. The percentage of the population over 65 will almost double, from 12 percent to 21 percent of the population. These older people – the people just graduating from college today – will expect a high level of mobility, and we expect the percentage of VMT by older people to grow appreciably. Drivers in their late 70’s have triple the fatality rate (per VMT) of drivers aged 30 – 65, and for drivers in their 80’s it is even worse. So we will face a serious safety challenge in providing for the safety of an aging population.
Also, our dynamic economy results in uneven economic growth in different regions. Almost two-thirds of all VMT growth over the next 25 years will take place in only six states, so that even if we keep up with transportation demands on the average, it will be difficult to keep up with these demands in the high-growth states where demands are growing most rapidly. Migration among regions in the U.S. is dominated by immigrants and young college graduates, who often move to central cities and increase demands for transit. We expect demand for urban transit (measured in passenger-miles traveled, or PMT) to almost double by 2050. Within metropolitan areas, non-work-related trips will become a larger percentage of all trips, as the population ages and the percentage of population in the workforce declines. Some of this non-work-related travel will take place during peak commuting hours, as workers engage in trip-chaining on their way to and from work. Some will take place outside of traditional peak commuting hours, contributing to the spreading of the peak traffic hours over the entire day.
Overall, we can anticipate an economy in the year 2050 four times as large, with surface transportation demands increasing by perhaps two-and-a-half times. How will our transportation system handle these demands? We certainly do not plan to more than double the number of lanes-miles of highways. Lane-miles of highway have increased by only 5.3 percent over the past 24 years, and an extrapolation to 2050 suggests that highway capacity will only increase by 10 percent by that year. So we can anticipate that transportation capacity will not keep up with transportation demand, and that congestion in our transportation system will grow.
Congestion already imposes heavy costs on our economy. The Texas Transportation Institute has estimated that, in 2003, highway congestion cost $63 billion per year, but this estimate leaves out several important factors. It leaves out productivity losses, costs of delayed freight shipments, costs of unreliable freight and passenger travel trip times, and safety and environmental costs. We estimate that, if all these other costs were included, the total costs of highway congestion would be about $170 billion per year. Moreover, congestion has been growing faster than GDP. Since 1982, the costs of congestion have been growing at 8 percent per year, more than double the growth rate of GDP. In 2003, congestion costs were about 1.5 percent of GDP. If congestion costs continue to rise at this rate, by 2050 they would be over $6 trillion, more than 14 percent of GDP.
How can we meet these challenges?
First, we need to find ways to use our existing surface transportation system more efficiently.
Intelligent Transportation Systems (ITS) technology holds great promise for reducing congestion. We have invested billions of dollars in ITS technology since ISTEA created the program in 1991, and we have developed a wide range of technologies that can address congestion problems. On toll highways, Electronic Toll Collection can speed the flow of traffic where previously it was stopped for manual toll collection. Automatic Incident Detection can alert highway managers to non-recurring congestion and speed emergency response vehicles to clear problems. Variable Message Signs and other forms of traveler information systems can alert drivers to congestion problems and give them an opportunity to divert to alternative routes. On arterials, adaptive traffic signal controls can adjust traffic signal timing in response to changes in traffic levels, speeding traffic on its way. Signal priority for transit buses can make bus service more like rapid transit, enhancing the attractiveness of transit and reducing congestion.
But deployment has been slower than anticipated. Even in cities where deployment of ITS technology is considered to be high, barely half of freeway miles might be instrumented to detect traffic breakdowns. One major city has installed almost 5,000 traffic signal detectors, but almost half of them are out of service. Many cities do not even manually update the timing of their traffic lights regularly, much less install adaptive traffic signal controls that can adjust traffic signal timing automatically. Moreover, as GAO pointed out in a report last year, even where ITS technology has been deployed, sufficient operating funds have not always been committed to pay for staffing of traffic management centers. So we have quite a challenge in deploying ITS technology everywhere that it is needed.
A second proven approach to using our transportation system more effectively is by using congestion pricing. While congestion pricing may still be controversial to some people, it is not controversial to people who have tried it. In Southern California, where State Route 91 has been using congestion pricing for 10 years, support for congestion pricing is widespread, and the reasons are obvious. Experience with congestion pricing on SR-91 shows that congestion pricing doubles the throughput on the congestion-priced lanes as compared with the unpriced lanes right next to them. With each priced lane handling twice as much traffic as a comparable unpriced lane, there is less traffic on the unpriced lane, and congestion is reduced for all travelers on the road. While lower-income people do not use the congestion-priced lanes as often as higher-income people, even lower-income people value the flexibility of a congestion-priced lane when they absolutely, positively have to get somewhere on time. In fact, about 70 percent of lower-income people in Southern California support congestion pricing. In Minnesota, 64 percent of lower-income people support the MNPass High-Occupancy Toll lanes.
Congestion pricing is something that we can do in the short run to reduce congestion. In the longer run, congestion pricing provides one of the best signals that we have of the need for new capacity. If people are willing to pay a high price to travel on a particular corridor, that gives us a good signal that capacity expansion in that corridor is money well-spent. It clearly is unlikely that we will be able to build enough capacity to keep up with the increases in transportation demands that we have forecasted. That means that we have to be extremely strategic about the capacity expansions that we do undertake – we need to make sure we spend our investment dollars in those places where the demand is the greatest and the impact on congestion reduction is clearest. If people are paying 50 cents or a dollar per mile to drive on an uncongested lane, that is a pretty clear signal that the demand for capacity expansion on that route is high, and that an infrastructure investment on that route will pay substantial returns in congestion reduction.
There are no magic bullets in solving the congestion problem. The approach that will work best is a multi-faceted, comprehensive approach that takes advantage of the complementarities among multiple strategies. That is the approach that we have taken in planning the Secretary’s Congestion Initiative. We have emphasized four complementary strategies – congestion pricing, expanded transit capacity, greater use of ITS technology, and more widespread use of telecommuting and other forms of flexible work scheduling.
We have already discussed congestion pricing – it works, and people like it when they get a chance to use it. But congestion pricing cannot do the job all by itself, and it is more difficult to use on arterials that are not limited-access.
For people who find charges on congestion-priced roads too high, we need to provide transportation alternatives, and that is where expansion of transit capacity comes in. Transit and congestion pricing complement each other. Transit provides an alternative for those who choose not to pay the congestion charge, so it improves the effectiveness of congestion pricing by encouraging people to divert to another mode. Likewise, congestion pricing improves the effectiveness of transit. Transit buses get free access to congestion-priced freeway lanes, so transit buses go faster with congestion pricing, providing the “rapid” in Bus Rapid Transit. That rapid service both reduces costs for transit authorities and encourages more people to use transit. The more people use transit, the more schedule frequency can be increased, and the better the quality of service. Congestion pricing sets off a “virtuous circle” with transit, where demand increases, allowing an improvement in service quality, which stimulates even more demand, which allows even more improvements in service quality.
Congestion pricing is more difficult to implement on non-limited access arterials. On these heavily used roads, ITS technology plays a particularly important role. Adaptive traffic signal control technology can make traffic on these arterials flow more smoothly. And again, there are complementarities between ITS technology and transit. ITS technology can include traffic signal priority for transit buses, helping them to go faster. ITS-induced improvements in transit service quality can set off the same “virtuous circle” as congestion pricing does – increasing transit demand, increasing service frequency, and increasing service quality. Increasing transit use in turn reduces the congestion burden that the ITS technology was deployed to deal with.
Finally, congestion is not a problem that government can solve by itself. We need help from private employers. There are a number of policies that reduce the extent to which vehicles have to use the roadways during peak hours. These include flex-time – allowing people to come in before or after the peak hour -- and cashing out parking subsidies so that people get the same commuting subsidy whether they drive a car or use transit. They also include telecommuting – allowing people to work at home at least part of the time. The Federal Government has increased the number of employees telecommuting by ten-fold between 1995 and 1999, and then by more than three times from 1999 to 2003. Private sector employers can do the same.
Other portions of the Secretary’s Congestion Initiative will also help to address the congestion problem. The Corridors for the Future Program, for example, received 38 proposals in response to its Federal Register notice in September, and we are now reviewing these proposals with the intent of ultimately selecting up to five major transportation corridors where substantial infrastructure investment could reduce congestion. This program will leverage public and private resources to accelerate infrastructure development on these corridors. The proposals include strategies to use congestion pricing, truck-only lanes, and accelerated deployment of ITS technologies. The Freight Bottlenecks portion of the Congestion Initiative focuses on Southern California, where we are working to sign a Memorandum of Agreement to accelerate the completion of key capacity projects in the Ports of Los Angeles and Long Beach.
We can make considerable progress on congestion even without building new lane-miles. But we recognize that we will need to build some new highway capacity. We cannot handle a two-and-a-half-fold increase in demand without more capacity.
The question is, how can we get the most bang for the buck?
How can we get the most reduction in congestion, and improvement in transportation services, from each dollar that we invest in transportation infrastructure?
First, DOT believes that we need to move toward an environment in which analysis by professional transportation planners forms the primary basis for our transportation decisions, and politicians get involved only as a last resort. Many of the projects that have been selected by the political process have never been obligated because the projects were not ready to move forward when the money was earmarked, and in some cases the money was never spent because opposition to the project developed.
That’s not to say that transportation planners can’t do a better job. There is a wide range of analytically sophisticated transportation planning techniques that are just beginning to come into use by transportation planners. Techniques like benefit-cost analysis and economic impact analysis help us to identify all the effects of a project – positive and negative – so that we can make decisions based on full information. We are also encouraging states and metropolitan planning organizations (MPOs) to make greater use of performance measures that would allow us to measure how well our improvements to the highway and transit systems perform. We need to think about Federal funding programs that reward states and MPOs whose investments are successful in achieving their performance targets. We recognize that there are important political considerations in the decisionmaking process – such as balancing regional needs for transportation infrastructure – but we need to work harder at basing our decisions on sound analytical techniques.
So there are a variety of techniques that we can use to improve the efficiency and performance of our investments in surface transportation infrastructure. We need to make more widespread use of them.
Finally, let me close by saying that I look forward to hearing from the witnesses from the National Surface Transportation Policy and Revenue Study Commission. Speaking for Secretary Peters and Deputy Secretary Cino, I can tell you that the Commission brings a wide variety of viewpoints to the questions of what kind of transportation system we need, and what kind we should have. The Commission has just received a tall stack of issue papers, which its members are now examining. It is making progress on defining surface transportation needs and identifying workable strategies. The Commission still has a way to go before it will reach consensus on these matters, but the members are hard at work, and I know that the Secretary, the Deputy Secretary, and all the members of the Commission are committed to providing a report to Congress that will provide guidance as you move toward reauthorization of the surface transportation system two years from now.
I appreciate your attention, and I welcome your questions.