Industrial Policy II or We Stick our Neck out

Last week I expatiated on what I feel is wrong with the usual calls to arms in respect to changing our energy regime—bully the auto makers into increasing mileage, fund a lot of fuel cell research in the National Labs, undertake a lot of pilots involving zero emissions vehicles and government fleets, and so on. Such well meaning initiatives haven’t worked in the past, and there’s little reason to believe they’ll work in the future. One instigates major changes by building new markets not by chivvying incumbent oligopolists. Does anyone seriously believe, for example, that the old Bell Telephone Empire would have launched the Internet? Building new markets simply wasn’t in their DNA, as they say.

So what’s needed here in the way of an industrial policy that might have some chance of succeeding?

Let’s try some thought exercises.

Suppose government on some level, preferably local, bought a transportation system that could really exert major competitive pressures on the existing regime and could compel them to change to meet changing market conditions and not because of top down regulation.

So what might this entail?

Ever since the nineteen sixties a number of transportation mavens, some in academia, some in the automobile industry, and some in private companies have talked about what is known as personal rapid transit, PRT for short. Personal rapid transit is a form of public transportation, but it is the very antitheses of bus lines, light rail, traditional railroads, and all of the slow, crowded, noisy, and expensive mass transit systems most of us have grown to hate.

Personal rapid transit would only be possible with the latest technology, and, according to some, it may not be possible yet (there are those who believe it is absolutely impossible, and we’ll discuss that in a moment). What it consists of is cars that carry one or at most a few persons, in other words, a single party, and take that party directly to the designated destination via instructions punched at a terminal or possibly through voice commands—sort of an automated taxicab, if you will. The car is summoned by the rider at a terminal and appears in no more than three minutes and then proceeds directly to the destination at speeds in excess of fifty miles per hour and perhaps in excess of 100mph. There are no stops, no remembering schedules or where to get off, no set routes, and there is, according to theory, little or no congestion because the entire system is computer controlled and the access of the vehicles onto the tracks is metered to maintain proper spacing. Cars onload and offload on sidetracks to avoid delays, and are monitored at all times to prevent vandalism or attacks upon occupants. Offenders within the cars are immediately transported to the nearest police station. Rush hour delays are eliminated or much reduced, and riders can go anywhere within a large metropolitan area within minutes. Furthermore, because the individual cars are extremely light compared to so-called light rails, and thus require track systems using far less building materials, project costs are fraction of those of existing light rail systems.

Personal rapid transit is radically different from any existing metropolitan public transit system. The vehicles are faster by far than any competing system and provide the rider with complete privacy. At least in theory.

So where do they operate, and when is one coming here?

While many companies have developed prototype PRT vehicles, no one has succeeded in selling a system—yet. No city has been willing to commit to a system because no system has proven itself. Simply put, it’s much easier for urban transit authorities to vote for conventional light rail systems even if no one rides them and they lose money. No one ever gets penalized for upholding the status quo.

Regardless of the lack of working examples, I believe that PRTs could work with existing technology. They couldn’t have worked in the late sixties when they were conceived because the cost of the required computing power was prohibitive and because computer modeling of complex systems was in its infancy. But today I see no fundamentally intractable engineering problems. Traffic management programs have proliferated since then, largely to handle packet flow over the Internet, and the same basic design principles obtain in transportation networks.

A PRT would have vastly greater energy efficiency than today’s automotive transport because it would run off grid generated electricity and would almost certainly reduce automobile usage in urban areas once the systems were built out. And mandates for clean electrical sources in powering such systems could take a big, big bite out of particulate emissions and carbon dioxide emissions.

True, there are many skeptics concerning PRTs, and any Web search on the subject will reveal truly venomous opposition full of the usual Web incivility to the effect that anyone who disagrees with the writer is both a sack of shit and an idiot (what motivates such vicious personal attacks in what is after all a technical discussion?).

Anyone with an interest in transportation policy should definitely acquaint himself or herself with both sides of the issue and come to his or her own conclusions. I’ve certainly studied the other side, and some of their points are well taken. The fact that no one has built a full scale functioning system to date has to give one pause, as the does the fact that many governments, local and national, have studied such systems with a view to implementation and have always backed off. But those who claim that numerous systems have been tried and failed are being disingenuous. No PRT system has even been built, only small scale people movers at airports and universities. Dubai is taking bids for a system now, and if that system is completed it will be the first ever.

None of the counterarguments I’ve seen have been based on rigorous simulations or mathematical models, merely on simplistic assumptions to the effect that an intelligent network is incapable of accommodating increased congestion any better than individual drivers in their cars. But such is the vehemence of the opposition, that I suspect that careful analysis of the systems has little to do with it. A friend of mine who is opposed to all forms of public transportation, puts it this way. “PRTs are covert socialist attack on the automobile and an attempt on the part of the State to curtail the freedom of the individual.” And that, I submit, is the real reason such systems are resisted so strongly.

Of course, there is nothing to prevent a private company from building and operating a PRT, but they’re generally seen as government enterprises.

In any case, I have yet to see any arguments that convince me that such a system would be impossible to build with existing technology or presents engineering problems of the magnitude of say a suborbital airliner. Financing such a system would assuredly be difficult, but the existing automotive transportation is simply not going to function better in the future. Streets will grow more and more congested, the air will grow more and more polluted, and gasoline will grow dearer and dearer. Somewhere someone will build such a system and make it work. And when that happens the opposition will have no where to go but back to its own online discussion groups.

So do an end run around the auto makers. Build one system and make it work in one big city and soon everyone will want one. The auto makers could try to lobby them out of existence, but I doubt they could pull it off, especially if gas prices keep going up. No one but the most committed right wing ideologue would willingly endure hours in transit to and from the job site while paying twenty dollars per day for gasoline when he could climb into an automated jitney and get to his destination in minutes for a couple of bucks. Even Americans aren’t that crazy.

Second Thought Exercise

A lot of people believe that the mid term future of the private automobile is the so-called plug-in hybrid where advanced batteries do a lot of the work, and an internal combustion engine functions as balance of plant as it were. Several companies are already in the business of performing aftermarket modifications on Toyota Priuses to permit plug-in recharging, and one major automotive parts manufacturer has formed a partnership with AFS Trinity, a California battery and flywheel manufacturer, to launch a vehicle.

We think that such cars are almost inevitable if gas prices stay elevated, and they probably represent a correct response on the part of the public in terms of promoting the long term economic health of the nation. They will, however, be resisted by American auto makers who bet the farm on SUVs and bet wrong and now need to improvise some kind of survival strategy for themselves.

So how to speed the adoption process along? How about temporary government sponsorship of free or almost free DC charging stations? DC charging, battery to battery, only requires a few minutes as opposed to hours for AC recharging, and so the purchaser of the plug-in hybrid is doubly encouraged. One needn’t really publicize such charging stations—people will find out—and the energy oligopolists will be caught flat footed. Maybe they will get them closed down by crying foul, although one could argue that no foul is being committed when the U.S. auto makers are perfectly free to make their own plug ins. But even if they succeed, the plug-ins themselves would not go away and would have received the initial impetus to grow in the marketplace.

Of course, the other attractive feature of plug-ins, is that they don’t require public infrastructure. One can charge the vehicle at home with off-peak hour electricity which is a far more energy efficient process than running off gasoline even when fossil fuel is used to generate the electricity.

Just Thinking….

So what’s the chance of either thought exercise being realized? We think PRTs are a very long shot, and that plug-ins won’t happen quickly but are fairly likely in the long term. We also doubt that anything approaching an effective new industrial policy for transportation will be implemented. It’s easier to make political hay with hot button social issues and it requires a lot less hard analytical work.

One final thought: Wi-Fi hotspots constitute a good example of how governments can encourage private sector change for the better without heavy-handed top down industrial policies that usually don’t work anyway. All over the U.S. municipalities have built low cost, high speed wireless networks in city centers and then turned them over to private entities to operate with the cities themselves serving as anchor tenants. The local phone companies, who are frequently unwilling to offer broadband in certain areas, have cried foul and litigated but generally lost in court, and have ended up grudgingly offering competitive services. Sometimes a little stimulus is all it takes to get a free market working again.