Eighteenth century-English writer Samuel Johnson once observed, “When a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.”
Crude oil near $100 per barrel ought to concentrate our minds in U.S. society, but that doesn’t seem to be happening so far. We could reduce oil consumption, improve the environment and get better use out of our highway investment with a couple of simple steps, but we cannot muster the political consensus or will to implement them.
For one thing, we have long tolerated – make that encouraged – moving too much freight by truck and not enough by rail or water transport.
Moving heavy material with steel wheels on steel rails takes much less fuel per ton-mile than using rubber tires on asphalt or concrete pavement. The numbers vary with specific vehicles and with terrain, but a rough average is that trucks use three times as much fuel to move one ton one mile than do trains. One study, not funded by either trucking associations or railroads, found that trucks used a range of 1.4 to nine times as much fuel. An Iowa State University study found that trucks transporting grain across relatively flat terrain used seven times as much fuel per ton-mile.
Water transport goes one step further. It is more fuel efficient than rail, but slower and less convenient.
Fuel isn’t everything, of course. Trucks are more flexible, generally arrive faster, and can go directly from any shipper to any customer without requiring any trans-shipment or reloading.
If there were no external costs involved, free market forces would suffice to reach an optimal balance of trucks, trains, barges and ships. But there are large external costs.
First, there are the environmental costs of burning fuel, both in terms of air pollution and in greenhouse gas emissions. There are also the societal costs of dependence on imported oil. According to Bob Dole and Alan Greenspan, this dependence is the primary factor driving U.S. military and diplomatic involvement in the Middle East. Finally, many trucks cause much more wear and tear on highways than they pay in fuel taxes.
The problem is that wear on roadways is an exponential function of weight and speed, not a linear one. A 40-ton truck does more than twice the damage of one weighing 20 tons. Moreover, in most cases, particularly when pavement is not perfectly smooth, a truck going 70 mph creates more than twice as much wear as one going 35.
All in all, an 80,000-pound truck, historically the maximum allowed in many states, may do 5,000 times or more as much damage as a single passenger auto. Studies repeatedly show that the fuel taxes paid by heavy trucks cover barely half the wear they impose on public highways. A few very overweight trucks impose even more inordinate costs on bridges.
Trucking industry representatives always retort that each heavy truck pays many thousands of dollars in registration and fuel taxes annually, and that while big trucks are a small proportion of all vehicles on highways, their share of total fuel taxes paid is many times higher.
Heavy trucks do pay a lot, but what they pay remains much less than what they cost society.
There is a simple, market-friendly measure to correct the environmental and import-dependence harm to society from burning petroleum. Tax fuel by an amount equal to these external costs it imposes. This has been economists’ preferred solution for nearly a century. It remains politically unpopular.
Higher per-gallon fuel taxes correct for environmental damage, but don’t address the fact that damage to roads rises faster than fuel use as trucks get heavier. This is a long-standing problem, but one technology is solving.
Global positioning systems to track and record vehicle locations in real time already exist and are sold as extra-cost options on some cars. “Weigh-in-motion” scales embedded in roads that weigh trucks passing over are getting more accurate and less expensive. Combine the two, and we finally have the capability to charge big trucks their true cost to society without overburdening light trucks and passenger vehicles.
Over time, billing heavy trucks for what they cost the public would move a great deal of heavy, low-value traffic from roads to rails. The change would not be immediate but it would reduce road wear, pollution and energy use. It would improve how productively we use available resources to meet our society’s needs.
However, the U.S. political system is what it is. Trucking associations are well organized and prepared to spend money on campaign contributions. Change will occur only when the general public recognizes what is at stake and communicates that to elected officials.
© 2007 Edward Lotterman
Chanarambie Consulting, Inc.