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High Speed Rail

2009-11-18T10:11:55-05:00

Background

To begin, I quote from a local source from Bremen, Indiana about 18 miles south of South Bend. “Baltimore and Ohio first came to Bremen in 1874 laying track and building a wood station. It was the connection to the outside world before automobiles were invented. Railroads brought folks to and from town along with the mail. It is hard to imagine all the freight going in and out of every town along the line such as crops, food, coal and dry goods. Train stations were also a hub of communication because they held the telegraph office.”

Thus the trains came before modern highways. In fact, the “Lincolnway” near my home in South Bend was one of the first roads and begun in 1913. Ken Burns in his series on the National Parks indicates that people could DRIVE to the new national parks for the first time about the same time. Automobiles gave the small but burgeoning middle class an unparalleled, unprecedented mobility. I remember reading that when the automobiles first sputtered into history, people would shout “get a horse”! Even after WW2 when I went from Chicago to Miami with my parents and cousins in 1948, there were no motels but motor courts, some quite primitive by modern standards but yes, with indoor plumbing! As a part of the Cold War, Eisenhower added the superhighways to supplement the Pennsylvania turnpike, the first one, that dates, I recall to 1940. It was about 1953 and designed to move people out of cities in case of nuclear attack.

My generation grew up with trains. As a kid I had a “streamliner”, “Burlington Zephyr” all aluminum and shining. It was on display at the Museum of Science and Industry in Chicago a few years ago. I remember coming to Mexico on a train in summer, 1951, flying to LA, and returning to Chicago on a “sleeper”, the El Capitan. I believe that I first flew in that same summer.

Advantages and Disadvantages

I will now jot down the need for and advantages of High Speed Trains, their drawbacks, and the complex political situation surrounding them. 110 miles per hour is the current goal to be expanded to 220. The French have tested one that would travel at about 350 mph. (I saw a video of it at the Indiana High Speed Rail or Golden Spike conference in Merrillville near Chicago last spring.) So called “magnitrains” (maglevel levitation) that travel above the road bend could go even faster but are expensive and safety is a factor. 1.) Trains go from point to point, not out in the “boonies” outlying areas as planes do. They are perfect with the young “wired” generation -- you can use your laptops AND cell phones to your heart’s content. 2.) They are not affected much by weather and can travel in just about anything but a blizzard or earthquake! (Maybe a tsunami!) No problem with leg room at all. I have seen photos of European and Canadian trains, and they are sleek, modern, and except for very long hauls like Chicago –LA, economical. They are as Illinois Governor Quinn said, “back to the future”.

Public Domain

FRA Compliant High Speed Rail

I fly a lot, just recently to Boston from Chicago. Security, of course, legroom, cramped quarters, and a feeling of being in a tin box are always concerns. Food is bad when you can buy it. Trains can link Midwestern cities that are somewhat isolated now like Evansville, Indiana that I recently visited. People seem to want them. As for automobiles, the roads are jammed, FOREVER under construction, and dangerous at night when you practically have to ski as the road narrows. I have heard of this elsewhere. Truckers drive like the roads are THEIRS, especially at night.

Now the drawbacks. Coast to coast and over water will require planes, of course. Then we have a federal system! Indiana resists trains, especially in Indianapolis where the state capitol is. Hoosier politicians, especially in south central Indiana, LOVE their roads. Part of this is the network of interstates around Indianapolis and, at least in good weather most of the time, the sheer convenience of driving, although parking garages grow more expensive by the day. We flew to San Francisco, but the Hyatt-Regency there charged $40 a night for parking. We have the South Shore between South Bend and Chicago, but the latest direct train back to SB from Chicago is at 7 pm. Otherwise, you take the train to Michigan City and drive the last 30 miles or so. If you miss that last train, you have to stay in a not-cheap hotel. It is ok for commuters and shoppers, but tough if you are neither.

Finally, cost. Amtrak loses money. Americans love their automobiles. I am not sure even the freight people are on board, but as with everything, ALL “stake holders” (all those affected by an action) have to be given a PIECE of the action. On November 3rd many in my area were urged to vote “no” on a “South Shore tax” that would pay for expansion of the South Shore AND the bus system in other counties but NOT ours (St. Joseph)! It is a tough time to raise taxes on anything. I am for trains but do not hold political office, and it is rough economic times for a lot of people. It often becomes a choice between cut services or raise taxes. A friend of mine lives on a DIRT road because people don’t want an extra assessment. It goes on and on.

Supplement Assessment

“A strategy for reducing transportation's dependence on oil in R and D for transportation in the next five next five years is vital….If new energy sources for transportation become competitive, public behavior will change and vehicles propelled by new energy will sell" -- Kaji Omi, "Alternative Energy for Transportation" in "Excerpts. Issues in Science and Technology". (25^th Anniversary Issue).

Supplemental Material from the Wall Street Journal

On Wednesday, November 4, 2009 a WSJ article by Scott Patterson and Douglas A. Blackmon was headlined, “Buffet Bets Big on railroad. Berkshire to Buy Burlington Northern for $26.3 billion” (A long-term optimism about the U.S. economy.)

The purchase “reflects his (Buffet’s) long-term optimism about the U.S. economy.” Buffett betting that “In an era of high fuel costs, railroads will perform better than the trucking industry. - --“as U.S. commerce recovers, so too will demand to move goods around the country.”

Buffett “likes U.S. railroads because their businesses are relatively immune to competitive pressures from low-wage overseas economies, which in recent years have battered U.S. automakers and other industries”.

T.J. Stiles puts railroads in historical perspective on W1 of the same issue. “Billionaires, like little boys, have long liked to play with trains. With his latest purchase, Warren Buffett is on track to be today’s Cornelius Vanderbilt”.

“States constructed some early railroads, but heavy losses discredited such public investments” (W2). In Vanderbilt’s day, nothing approached the size and importance of the railroads, not mining, energy, or even manufacturing. But the efficiency and wealth produced by his lines fostered a far larger and complex economy. (The railroad bubble popped and started a depression.) Buffet can’t match Vanderbilt’s power and fortune because of the economy’s diversity. Yet that same diversity should help to bounce back, and boost, Burlington Northern.

“The railroad has been iconic since its inception. It represents the quintessentially American urge to conquer space and time. (Not want a Commodore today). “Violent, ruthless, brilliant, honest and competitive to the core. Matched to his tumultuous times, as America spread across the continent, “fought a Civil War and erected a corporate economy”. He was “just the man to battle to the top of our first great industry”. Times have changed, and railroads are now among our oldest industries. The quieter Sage of Obama (Buffett) might be the right man to make us proud of it again”.

This is NOT about passenger trains, but the freight people are slowly coming “on board” as I heard last spring in Merrillville, Indiana at the Indiana High Speed Rail or “Golden Spike” convention. (There is a replica of that “last spike” of May 10, 1869 on W2. This is the kind of “back to the future” that I like as I “pass the torch” or, in this case, SPIKE!!

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Contracts 101

2009-11-14T08:20:34-05:00

CONTRACTS 101

WHAT'S YOUR DOGGONE HURRY?

I see one of my most important roles as a Contracts and Supply Chain Manager as being able to lessen or mitigate the business risks and legal risks of my employer. I'm a problem solver and I often feel like a battle-scarred crusty sargeant whose job it is to make sure my superior, the freshly minted 2nd lieutenant from West Point with no battle experience, doesn't get us all killed. An extreme analogy, I know, but one that I think fits more often than not. There just is no substitute for experience gained in the harsh realities of everyday business. So here comes my first "war story".

Early in my career, I was a Contracts administrator for a small flight simulation company. We outsourced the actual manufacture of the simulators themselves, but we designed in-house the flight simulation software and related training materials that went with it. I got a frantic call one day from one of our major customers that provided military aircraft to the Air Force. He needed us to send him a flight simulator ASAP because HIS military client was breathing down his neck for the simulators to be delivered before the next shipment of my client's planes was to arrive at the base. I did some checking with my program manager who said, yes, we had one ready to roll in a few days. I told the client, "yes, we can deliver the flight simulator and training materials early if you accept our standard terms and conditions" and offered to fax those to him along with our quote. He said "I haven't got time for that. Here's your ***** purchase order number . Just ship the ***** right now!" I thought "hmmm, I can't believe he doesn't even want to see the terms". Sure enough, here came his purchase order over the fax about 10 minutes later, with NO terms and conditions of any kind attached. I sent the confirmation letter back along with our standard terms and conditions, including payment terms that stated that 90% of the total payment price was due upon notice of shipment from the factory, and that title and risk of loss passed to the Buyer upon shipment, not delivery. I thought to myself "man, I sure wouldn't have made that deal like that. This guy must either be new, or really in a hurry, or both".

Well, you guessed it. The 18 wheeler carrying the flight simulator jack-knifed going over the Continental Divide and a multi-million dollar piece of equipment got smashed all to hell. The buyer from the airplane company calls in a state of panic, tells me what happened, and demands to know what I'm gonna do about it. I calmly informed him that title and risk of loss had passed to him the second it left the dock and we had just sent him an invoice for 90% of the purchase price. His voice went up about three octaves and he said "For ***** sake, can't you do ANYTHING????" I again explained that the risk of loss was entirely his and that his only recourse was against the shipper, not us. I could tell that for this poor guy, the Gates of Hell were opening wide. I said, "I'm sure you bought freight insurance, didn't you?" Long silence, no answer. He said in a much weaker voice "uhhh, I guess we did. I'll have to check. But I still wanna know, WHAT ARE YOU GONNA DO ABOUT THIS????"

I said, "well, I guess we can always sell you another one".

CLICK!!!

About three days later I got a call from their "NEW" guy, ordering another flight simulator. I never forgot that episode and I swore that from that moment on, I didn't care if the building was on fire, I would always take ONE LAST LOOK to protect my company (and my own derriere) before I ever let anything go out under my signature ever again. I'm sorry, but it's my job, my ethical duty to my employer and my profession , and my rear end. In that order.

So, WHAT'S YOUR DOGGONE HURRY?

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The Myth of Bad Bacteri...

2009-10-05T17:37:04-04:00

Written by Zeta Angelich, MS. , Jeff Donahue, and Dennis Schneider, Ph.D.

Used only with express written permission

"Not all bacteria are created equal. As with antibiotics, different types are better for different conditions” Dr. Ranit Mishori

There are “good” bacteria and “bad” bacteria. “Not all bacteria are created equal. As with antibiotics, different types are better for different conditions” as stated in a report by Dr. Ranit Mishori in a recent article in Parade Magazine entitled “Food with ‘Good Bacteria’ Can Improve Health.” It is the same with its use in the petroleum industry, but sadly bacteria, or microbes which are the same, have a bad reputation and only through the education of the benefits of bacteria to solve oil and gas well problems will the industry reap its benefits.

The successful use of “good” microbes in the petroleum industry is not new. For over 20 years, Micro-Bac International has been a pioneer in new techniques for using specific microbial cultures for different uses. From the first commercially successful use of microorganisms to control paraffin, we have used our products to control scale, corrosion, and asphaltenes. In recent years our focus has been on well stimulation; actually increasing the production of existing oil wells. The average increase in production is 30% with generally no increase in water cut. There are additional benefits to microbial treatments. Electrical costs can be reduced by reduction of drag on the pump rods due to control of paraffin accumulation. The cost of water injection in water floods or water disposal systems can be reduced by reducing plugging in the system or the formation. Sludge can also be removed from petroleum storage tanks.

A particular dramatic success story of the use of Micro-Bac “microbes” is one Alaskan Well with $0.00 production in a 1 ½ year period that was scheduled for a plug and abandon. After analyzing the well and prescribing the proper treatment with our bacteria product, within six months it had produced 363,000 barrels of oil.

Part of the problem associated with microbial use in the oil field has been a past of history of “snake oil” salesmen giving bacteria a bad name. Armed in many cases with only the term “bugs” as a sales tool, and no additional technical backing, they peddled bacteria out of the back of pick up trucks across the oil patch and cared only about the immediate cash sale, not the performance of the product for their customer. Many of these products were not fully developed before introduction to the market and these companies did not know how to analyze oil samples or well history well enough to offer not only the correct version of their products or even the correct volume of product to treat the well.

In the final analysis, all of life happens at a microscopic level. It is created at that level, it is altered at that level, and it can pollute at that level. Naturally, it only makes sense that it must be corrected at that level.

Dennis R. Schneider, PhD

A recent customer of Micro-Bac International, Inc. purchased bacteria/microbe products of ours to deal with severe paraffin problems in a well. The foreman was given the correct treatment protocol for his test wells, but decided to use ½ the prescribed dose thinking he could save money. The treatment did reduce the paraffin but it did not last as long as it would have had the correct dose been used initially which would have made them thousands of dollars. This company is placing a new order and has agreed to follow the prescribed protocol to maximize their return. This is why some companies are not successful because their focus is often on immediate savings. He focus should be on using a successful technology that could transform the way oil field problems are handled.

People in the oil industry know that every field has unique characteristics that must be dealt with to maximize production. For that reason Micro-Bac offers a wide variety of solutions to address the complete range of carbon chains and corrosion found in reservoirs. An added bonus is that our products are environmentally safer than chemicals and leave a low carbon imprint.

“In the final analysis, all of life happens at a microscopic level. It is created at that level, it is altered at that level, and it can pollute at that level. Naturally, it only makes sense that it must be corrected at that level.” states Dennis R. Schneider, PhD., Vice President Director of Research & Development for Micro-Bac International, Inc.

Visit www.micro-bac.com and click on OIL FIELD for more information about Micro-Bac products, plus case studies dealing with some of the problems that we have corrected. We also provide services and products for bioremediation, water and wastewater treatment, food processing, and animal waste.

Zeta Angelich is the Director of Marketing for Micro-Bac International, Inc., Round Rock, Texas.

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Taxes Versus Tolls the ...

2009-07-02T16:40:16-04:00

The wealth Americans enjoy depends upon the efficient movement of goods and services. When the Pennsylvania Turnpike opened between Philadelphia and Pittsburgh, trip time halved. Suppliers suddenly had twice as many people to sell to. Consumers had twice as many purchasing options. Efficient transportation yielded benefits to both suppliers and consumers.

The same benefits accrue at the micro-level, proportionately smaller in scale. A new traffic signal that hastens traffic flow produces economic benefits. Similarly, one that hinders more than hastens, cause economic damage.

America's transportation system is the envy of the world. Yet, managers have failed to keep pace with growth. The inevitable result, growing traffic congestion, imposes economic cost many times greater than the cost to eliminate it.

Users seem paradoxical in their willingness to pay for better service and in their simultaneous resistance to higher taxes. This apparent conflict frustrates political leaders who fail to recognize the consistency in the paradox. A coherent new policy has yet to crystallize.

Scholars from both the political left and right have been in agreement for at least two decades that transportation must move to market-based financing. Resistance to change is centered in the most powerful of special interest groups: the political class. Empowerment of markets or consumers means less power for politicians.

The Federal gas tax, scheduled to expire in 1972, was introduced in 1956 to finance construction of the Interstate Highway system. The Federal tax is currently at $0.184 per gallon. State taxes range from Georgia's $0.075 to Wisconsin's $0.321 with Colorado at $0.22.

This generates 40 billion Federal dollars annually and most of this money eventually finds its way back to the states in some form. There are no federally-owned highways, airports, railroads or transit systems. Colorado gets about 1.275%, but about 1/3 is diverted.

Since completion of interstate highway construction in 1982, Congress has turned the Federal gas tax into the nation's most outrageous pork program. Reagan vetoed the 1982 transportation bill because it contained 10 earmarks. Historically, specific project designations in federal legislation were prohibited. There are currently 3,248 earmarks.

Colorado gasoline taxes fund the Highway User Trust Fund. HUTF revenues are shared between CDOT and nearly 400 Colorado local governments with roads. Three intractable trends are shrinking HUTF revenues: fuel economy, inflation, and diversion. Their combined effect may exceed 5% per year. This halves the HUTF every 15 years. The politician who advocates doubling taxes will have a short career. A different finance system is inevitable. The challenge is to conceive one that works better than the gas tax.

Gas tax user fees have two fatal flaws. Centralization of funds creates a target for special interest groups and political interests. More significantly, paying at the pump conveys the perception that system-use is free, causing a tragedy of the commons. That is, disproportionate numbers try to use the system at the same time, rush hour, resulting in system failure known as traffic congestion. This, in turn, motivates infrastructure to be unnecessarily enlarged. A close look at traffic count data reveals that the most congested roads are capable of moving twice as many vehicles.

Electronic toll collection has made tollbooths obsolete and facilitates variable tolls. ETC eliminates tollbooth accidents and reduces collection costs. Variable tolls vary with demand insuring that a lane is never congested. Never-congested lanes move more vehicles during peak periods than do congested lanes. Moving traffic consumes less fuel per mile traveled, reducing emissions. Excess revenue generation is a signal that more infrastructure may be needed and provides a funding source.

Prior to 1956 Eisenhower, who favored tolls and McDonald, his highway chief, who favored the gas tax, struggled to decide the future of transportation finance. The gas tax accelerated rapid development of a four million mile roadway network. A finance system that helps operate and maintain the existing system is now appropriate for the future.

Tolls are inevitable. Enlightened political leadership will work to educate the general public of the benefits by strategically located demonstration projects. As dependence on the gas tax decreases, those revenues can be reassigned to local governments to help address their funding shortfalls.

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