Knowledge that Transforms

World oil is a mixture of economics and politics. Economic factors indicate competition among producers will again become effective provided the consuming nations do not capitulate in advance. Saudi Arabia is the dominant producer. Efforts on the supply side to develop additional reserves will only shift the exhaustion curve toward the present. Exponential growth in consumption has serious long run implications.

This paper begins with the premise that our intercity passenger transport system is less effective than we would like, and it asks if there is a place for revitalized railroad passenger service. The railroad passenger efforts of the thirties and of the early fifties were doomed at the outset by public policy favoring airport and highway development. Energy and environment may be factors, but service must be made attractive. The paper concludes that the railroad role is in the 500 to 1000 mile range between heavily populated areas where congestion is severe. It concludes that such service can be made equal to airline and bus service.

This paper considers Amtrak from an economic viewpoint. It analyzes Amtrak's markets and determines that there are two: corridors and long distance routes. It suggests criteria for evaluating Amtrak performance. It finds no case for subsidizing the long distance trains, but does cite circumstances under which corridor operations would be deserving of subsidies.