WILL HIGHER GAS PRICES HELP MASS TRANSIT?

 Who’s not upset about higher gas prices?  Proponents of mass transit.

Transit advocates might be accused of a little schadenfreude, taking satisfaction in drivers’ pain at the pump.  Or maybe they’re renewing their long term dream: Maybe this will finally push people out of their cars and onto the train and bus! 

Maybe not.

In 2008, when gasoline spiked, ridership on Metro-North surged.  Connecticut commuters did the math and decided the train beat sitting on I-95 burning $4 gas.

But these days gasoline is not the main cost of driving. 

Sure, the price of gas is just the most visible expense … the one glowing at you on every street corner.  But for most drivers, that’s only a fraction of what they’re already paying. The real costs are “sunk”: car payments, insurance, maintenance, depreciation.  Whether gas is $3 or $5, you’re still writing those checks every month.

Your car doesn’t get cheaper just because you leave it in the driveway.  It just sits there like a very expensive lawn ornament, depreciating.

So when gas rises by a dollar a gallon (as it has in a month), the typical commuter might spend an extra $30 or $40 a month.  Painful, yes.  But not exactly life-changing when you’re already paying hundreds monthly for the car itself.

Gas prices are the classic example of an inelastic market.  Prices go up… and people grumble, but they keep driving, in many Connecticut locales because it’s the only option.

Of course, the transportation equation depends on what alternatives to driving you might have.  Is there a bus?  When’s the train?  How frequent and reliable is the service?  And what’s the fare?  

Assuming there are mass transit alternatives to the daily drive, some commuters may become part-time transit riders. They’ll drive some days, take the train others, especially when traffic or the weather are brutal.  Or maybe when gas spikes even higher.  Or when parking in Stamford or New Haven feel like highway robbery.

Early signs are already there.  Commuter ridership on Metro-North Railroad was ticking up even before the Iran war. That may continue.

Ironically, the railroad is now running a social media campaign encouraging riders to avoid standing in the aisles and vestibules on crowded trains, instead sitting in that dreaded middle seat on the three-seat side.  They say this will “avoid crowding”.  That’s putting the mass back into mass transit.

So the real “trigger price” for behavior change in commuting isn’t just a number on the gas pump.  It’s a combination of factors: sustained high prices, lousy traffic, expensive parking, and most of all, whether you actually need to make the trip at all.

Work from home seems a lot more attractive these days, something we didn’t have as an option in previous oil “shocks”.  Thank you COVID, the ultimate commute-killer.

Let’s be honest: you can’t argue with the convenience of driving.  But to save money, people will adjust: combine trips, carpool, skip errands, shop online.  Or even rethink that low-mileage SUV.

PS: Just as gas prices rise, there’s another 5% fare increase coming this summer for commuter rail in Connecticut … and a potential 30% cut in Bridgeport bus service. Timing is everything.

COULD YOUR MAIL REALLY STOP?

 

You may not get any Christmas cards this year. Or bills. Or junk mail. The U.S. Postal Service is once again warning it’s in real trouble, and this time, they’re not whispering. 

You want to see someone speaking truth to power, check out Postmaster General David Steiner testifying to a House Oversight Subcommittee. “Without action,” he told the pols, “the Postal Service will run out of cash.”

Without Congress doing something the USPS won’t stop your home deliveries, at least not every day.  But we may lose Saturday mail.  And see smaller post offices close.  And first class rates could zoom up to about $1 per letter.

The problem is simple: first-class mail is dying. Not sick. Not struggling. Dead… replaced by email, autopay, and whatever app you’re using to read this.

Think of it.  How much “real” mail do you get each day?  I mean letters from people, not just companies trying to sell you something.  How many letters do you send and how many stamps do you buy?  Compare your volume of paper mail to your email and you’ll understand the problem.

Not that the USPS hasn’t innovated on technology.  I love their “Informed Delivery” option telling me (ironically, by email) what will be delivered to my real mailbox later in the day.

There’s been a 50% drop in first class mail since the early 2000s.  And it’s first class where the USPS has historically made its real profits, not with marketing mail or packages.  In 2019 a stamp was 55 cents.  Today it’s 73 cents.  And despite that jump the Postal Service is losing about ten cents per letter in delivery cost vs revenue. 

That’s what we call a death spiral: raising prices to cover losses, only to drive away the customers you needed to survive… just like on our commuter rail lines.

The problem is worsened because the Postal Service has to deliver to every address in the US.  In Connecticut that means everywhere from Hartford to Union (population 785, so small it doesn’t even have its own zip code).

To do its job the USPS maintains a fleet of 257,000 vehicles, from trucks to delivery vans, serving 168 million delivery addresses.  They have over 530,000 employees making the USPS one of the largest employers in the country.

And those employees, while they presumably enjoy the jobs, are also promised nice pensions.  Long time workers (hired before 1984) can retire with pensions of 60%+ of their final salary. 

Despite staffing reductions of 25% between 2008 and 2015, the Service is looking at $10 - $15 billion in annual pension and retiree health benefits in the next few years, long-subject to pre-funding requirements.

The USPS also supports more than 33,000 physical post offices nationwide, making it the largest retail network in the US, roughly the same as Starbucks and McDonalds combined but with a lot fewer customers. That’s a lot of overhead. 

How will the Congress respond to the Postmaster General’s dire warnings last week?  Probably by letting USPS borrow even more money beyond its current $15 billion cap, because nothing says “long-term solution” like more short-term debt.

So pick your poison:  higher prices for stamps, fewer post offices, reduced deliveries, all of the above… or just “kick the can down the road”?  Which do you think Congress will choose in this election year?

 

 

 

 

A GIFT AT THE PUMP IN AN ELECTION YEAR

Do you want a “gas tax holiday” to help buffer the rising cost of fuel?  Your first reaction is probably a loud and enthusiastic “Yes!”

But before we all start planning what to do with those extra quarters’ savings per gallon, it’s worth asking a couple of uncomfortable questions:  who really benefits and who’s really paying for it later?

Governor Lamont says suspending the gas tax would help your already-squeezed wallet as global oil prices climb during the Iran war. Fair enough.

But let’s not forget one small detail.  It’s also an election year.

And if that sounds familiar, it should. The last gas tax “holiday” came in 2022 — another election year.  Funny how that works.

Still, as one seasoned Connecticut legislator once told me: “Sometimes good politics is also good policy.”  Translation: even a political stunt can occasionally help people.

Gas taxes fund the state’s Special Transportation Fund (STF) which spends about $2.3-billion-a-year for highways, buses, rail service and the endless maintenance required to keep Connecticut moving.

Right now the STF looks healthy enough.  But the state’s own forecasts show trouble ahead as costs rise and revenue from gasoline taxes slowly declines.

A gas tax holiday would drain about $40 million a month from the fund… money that normally pays for things like fixing potholes, maintaining bridges and subsidizing Metro-North.

So yes, a gas tax holiday would save you a little money at the pump.  But remember: the state’s transportation system still needs to be paid for somehow.

Until recently, transportation planners worried that electric vehicles would slowly starve the STF because EV drivers don’t buy gasoline and therefore don’t pay gas taxes.  But now federal policy toward EVs has been, shall we say, less enthusiastic.  Which means that deficit problem may arrive later than expected.

Of course, with gasoline pushing toward painful levels again, an electric car is suddenly looking pretty attractive, assuming you can afford one.

Remember the last “holiday” in 2022, when Russia invaded Ukraine and fuel prices surged?  The state suspended the 25-cent-per-gallon tax for nine months, then slowly restored it over five months so drivers wouldn’t feel the shock all at once.  Average savings worked out to roughly $100 to $120 per driver.  Nice, but not exactly life-changing.

In other transportation news this week…  the Connecticut Department of Transportation seems to be going after truckers again.

During February’s blizzard, CDOT did an admirable job clearing the highways.  Unfortunately, their work was repeatedly slowed by tractor-trailers ignoring the statewide truck ban and jackknifing across the interstates.

Currently the fine for violating a truck ban is just $90.  That’s barely more than a parking ticket.  CDOT wants to raise the penalty to $250, which might finally get some drivers’ attention as a deterrent to risking travel in a blizzard.

But where exactly are trucks supposed to go?  If they pull off the highway during a storm, where exactly can they park?  Connecticut has only 363 truck parking spaces statewide at rest areas.  But CDOT estimates that more than 10,000 trucks a day travel I-95 alone.

Truckers get paid for delivering freight on time, not for sitting in a parking lot waiting for the snow to stop.

So if the state wants stricter compliance with truck bans, it might help to provide drivers with two things:  more notice … and somewhere safe to park.

 

IS OUR ECONOMY IN A "STRAIT" JACKET?

Why are your gasoline prices jumping?  Because oil tankers can’t travel through the Strait of Hormuz… and not just due to the Iranians, but because of insurance.

Funny thing about global oil trade: it’s not controlled by admirals or presidents.
It’s controlled by insurance underwriters in London.

My favorite go-to expert on all things regarding world shipping is Sal Mercogliano’s amazing YouTube channel, “What’s Going on with Shipping”, a nightly TV addiction of mine.  As a former merchant mariner turned academic, Mercogliano points out that the cost of war risk insurance is what’s really stopping the tankers.

When you own a $100 million tanker (empty and not carrying a drop of oil) you usually pay 0.1% – 0.3% of the vessel’s value per trip for coverage.  This past week the underwriters were demanding 1-3%, or about $1-3 million per voyage. 

If 20–40 tankers make that transit daily, the theoretical exposure could reach $5–10 billion per day of insured cargo and vessels.

At those prices, anchoring your tanker becomes cheaper than risking the transit.  Because crippling a tanker doesn’t take a $100 million fighter jet anymore.  A $50,000 drone boat will do just fine: a lot of bang for the buck.

Russian LNG tanker attacked by drone in Mediterranean

The recent Red Sea crisis of 2023 shows how widespread these attacks have become: 164 missiles and 265 drones fired at shipping, 79 ships targeted and 29 vessels hit.  And that’s just by the Houthis. Imagine if a real navy joined the party.

Can the White House realistically offer to have Uncle Sam underwrite that cost and assume those incredible amounts of risk?  It may have to, right after it finishes fixing health care, student loans, and the Northeast’s commuter rail system.

How about US Navy escorts?  That could be done, though in the Red Sea crisis the Pentagon did not run full convoy escorts like it did during the 1980s tanker war.  And again, not cheap.

What’s this all mean to Connecticut, the economy and your wallet? 

Like Covid, this may qualify as what economists call a “black swan” event: extremely rare and unexpected, having a massive impact and, after the fact, people claiming it was predictable (which it probably was).  So maybe that makes this a gray swan instead?

Think of the 39-mile-wide Strait of Hormuz as the Merritt Parkway of global oil traffic: too narrow, over‑capacity, and one bad move from a miles‑long backup.  The difference is that when something goes wrong in Hormuz it’s not a Subaru crashing into the guardrail near Trumbull… it’s a supertanker full of crude and a shock to the global economy.

2 million bbl VLCC - Very Large Crude Carrier 

With about 20% of the world’s oil passing through this, the world’s most vulnerable oil chokepoint, we can expect higher gasoline and home heating oil prices, a devastating effect on the stock market, a disruption of global supply chains and soaring inflation.  That probably means higher food prices, more expensive airline tickets… and, of course, even higher gasoline prices.

When Hormuz sneezes, the global economy doesn’t just catch a cold; it ends up in the ER with a stack of unpaid bills and a lecture from the IMF.

 

 

 

WINTER WARRIORS: CDOT VS MOTHER NATURE

I used to think March 1st meant Spring was around the corner.  This year it means Winter is just getting warmed up.  Last week’s blizzard followed by mid-week “flurries” convince me that May is a better hoped-for date for a reprieve. 

Meantime let’s give credit to all those who kept us moving in the worst of what Winter has had to throw at us.

ON THE RAILS:                While some railroads (like NJ Transit and the LIRR) “temporarily suspended most service” (i.e. shut down) before or during the blizzard, Metro-North kept chugging along, albeit on a reduced schedule.  Amtrak kept the Northeast Corridor technically open which in a blizzard counts as a small miracle.  Understandably, people were warned to stay off the roads, but if travel was absolutely necessary the train could get you there.  So thank you to the crews that worked tirelessly to keep the station platforms plowed, track switches cleared and the trains still running.

ON THE ROADS:    Here’s where the miracles happened.  The faceless teams of plow operators and salters worked night and day reopening our interstates as quickly as possible.  Even on Wednesday, with another brief storm, my drive along the coast on I-95 from Fairfield County to Rhode Island appeared clean and well plowed.  I saw several conga-lines of plows clearing the travel lanes and shoulders and using bucket and dump-trucks to remove what remained.

Where does all that snow go?  Most is what they call “toss snow”, literally tossed off to the side of the road.  On bridges and overpasses, giant snow blowers are called into action. In cities like Hartford larger amount of snow are trucked to state property to await melting. 

But there was so much snow to be removed this week that CT’s Department of Energy and Environmental Protection (DEEP) temporarily allowed dumping in local rivers and even Long Island Sound.  That’s despite the fact that plowed snow carries road salt (chlorides), sand, oil, tire particles, litter, fertilizers, and other contaminants, which can degrade water quality, harm fish and aquatic life.

Clean water is important. So is clean pavement.

CDOT uses salt brine to pretreat our highways, roughly the equivalent of 100 pounds of salt per lane-mile in each direction, lowering the freezing temperature of water to - 6 degrees F.  Years ago they used sand but abandoned that for environmental reasons.  Then come the plows and salt trucks.  

Morton Salt mines

Understandably, rock salt is in short supply this year so it now costs over $80 a ton.  Most comes from Morton Salt’s mines in upstate NY while some is also imported by the shipload from as far away as Chile.

In some states, fracking brine (euphemistically called “produced water”) is used for highway treatment.  But that’s banned in Connecticut due to its residual radioactivity.

All of these salty corrosives aren’t good for your car, damaging the frame, underbody, brake and fuel lines, suspension components, and fasteners. Rust never sleeps. That makes washing your vehicle after a storm even more important… after, of course, removing the ice and snow atop your vehicle lest it fly off at high speed endangering other drivers.

CDOT had almost 650 trucks clearing 10,000+ lane miles of state highways during the blizzard.  In your town or city your local DPW cleared the local roads.  And in shoreline communities like Madison the 22” of heavy, wet snow was still being cleared days after the storm.

So effective were the CDOT crews that Governor Ned Lamont later dispatched CDOT personnel (drivers and mechanics) and equipment to Rhode Island and Massachusetts to assist in their clean-up.

Thank you also to neighbors who didn’t park their cars on local roads impeding plowing and then cleared their sidewalks, incentivized by local ordinances.

And then there are the private plow operators whose long hours during and after the blizzard have made for a lucrative if exhausting period of work.

The Winter of ‘26 isn’t done with us yet.  The crews will keep plowing.  We’ll keep salting.  And come April we’ll all complain about potholes instead.

DIESEL DEJA VU ON SHORE LINE EAST

It was only three years ago that CDOT made a big hoopla over adding electric-powered M8 trains to the Shore Line East rail line from New Haven to New London, promoting how clean, quiet and fast they were.  

Governor Lamont hailed them as “fighting climate change by investing in cleaner, greener transportation.”  Passengers loved the new cars for their quick acceleration, comfy seats and plugs for charging their devices.

Now CDOT says they’re too expensive to operate and will be replaced by the older diesel locomotives and second-hand coaches from Virginia.

As CDOT Commissioner Eucalitto told lawmakers, reverting to diesels is better than cutting service, as if this was the only option in his $15 billion five-year transportation program.

DOES CDOT WANT TO KILL SHORE LINE EAST?

It sure seems so… and with Amtrak’s help.  Post-COVID while the other rail lines were restored to full service, Shore Line East was not.  CDOT blamed low ridership … the predictable result of running fewer trains and then acting surprised when fewer people ride them. 

Compared with the shiny M8 trains, diesels are slower to accelerate and create a witches brew of noxious gases even though they burn what’s called ultra-low sulfur diesel (ULSD) fuel, the railroad equivalent of “clean coal”.  Nothing says “climate leadership” like bringing back the spewing exhaust.

Photo Credit - Ewing Leon

The real reasons for this reversion?

First, Metro-North needs those Shoreline East M8’s to run elsewhere.  They’ve already been sighted on the Harlem line.  When equipment gets tight, the shoreline always seems to be the first place CDOT looks for “flexibility.”  

And second, because CDOT says it can save $8.8 million by not having to pay Amtrak for electricity to power the M8’s or for the privilege of using their overhead catenary power lines.

Amtrak is acting like a greedy electric company… charging you to plug your hair-dryer in their socket even before you turn it on.  But saving $8.8 million by making service worse is the kind of efficiency that only works on spreadsheets.

DOES AMTRAK HATE COMMUTER RAIL?

While in most of the US Amtrak operates as a guest on freight railroads’ tracks, in the Northeast Corridor they’re the boss and their profitable Acela trains get the VIP treatment while commuter lines schedule their trains in between.  That’s why Amtrak is able to bully CDOT and Shore Line East: it’s their tracks and wires.

But in Connecticut where the state owns the tracks west from New Haven to the NY state line, Amtrak is our customer and we get to call the shots.  So why doesn’t CDOT just tell Amtrak to play nice if they want to keep those over-priced Acela trains on time?

Amtrak pays Metro-North a bonus for keeping its trains on schedule in Metro-North territory.  Maybe we could make a deal for letting our M8’s keep running on Shore Line East?

NEW LOCOS & RAILCARS

CDOT has 60 new passenger cars and six dual-mode locomotives on order which should start arriving later this year.  But none are promised to Shore Line East.  Instead the branch line riders to Waterbury and Hartford will be riding in style (in cars with Wi-fi) while Shore Line East commuters (or what’s left of them), are clunking along in 35-year-old hand-me-down trains.  Hartford gets Wi-fi while New London gets nostalgia with a cloud of diesel exhaust.

Shore Line East was created to relieve highway congestion on I-95.  Now it risks becoming a case study in how to discourage rail ridership without ever formally abandoning it.  Is it any surprise that locals refer to the southeast part of our state as “Connecticut’s forgotten corner”?

VANITY LICENSE PLATES

Your car has a face, and in Connecticut, that face can be subject to editorial review by the Department of Motor Vehicles.  Six characters may not seem dangerous, but in the wrong order your choice of vanity plates may apparently pose a serious threat to public morality. Or so says the DMV.

Since 1937, Connecticut motorists have been allowed to personalize their license plates… slowly, cautiously, and always under supervision. The earliest vanity plates were just two initials.  When possible combinations maxed out, you could do four letters.  And by the 1970’s, six characters combining letters and numbers.

Today you can also order one of the dozens of different special plates supporting various organizations or causes ranging from Friends of the Amistad to Preserving Long Island Sound.  There are plates for your pet, Special Olympics, Greenways, the Marine Corps League, Gold Star families, the Red Sox and Amateur Radio too. The DMV’s most recent addition celebrates Connecticut as “The Pizza State”. 

Mind you, not all requests for vanity plates are approved, despite their application fee of roughly $90 to over $140, depending on the plate.  That’s because the killjoys at the DMV don’t allow anything profane, crude, obscene, or vulgar.  Context, irony, and spelling variations are apparently not mitigating factors.

Examples of some of the 350 applications reportedly rejected in 2024 include WEEDBIZ (drug dealer?), F4RTBOX (bad muffler?), BIGSEXY (don’t ask) and GR8FUL (presumably a Jerry Garcia fan).  But somehow these plates got approved:  DICKS, BUTTS, BALLS and TOOL.  And we have confirm sightings of FUBAR, COVFEVE, PUTIN and RUSSIA.

So yes, these plates have existed in the wild, roaming our highways freely, confusing children and giving their parents a chuckle and something to explain to the backseat crowd.

I had a doctor once whose plate read NOPCMD.  I asked him why he hated computers.  He said I was misreading the plate and that I’d forgotten he was a urologist.

In a similar vein there’s the New Hampshire woman, Wendy Auger, who for many years has proudly displayed her plate PB4WEGO, harkening back to the phrase always uttered by Dads to their kids before a road trip.

It took the NH DMV 15 years to notice, which says less about the plate and more about the review process. For a time the DMV told Auger to return her plates as they suddenly realized they refer to a bodily function. The state has since relented.  After all, New Hampshire is the “Live Free or Die” state.

Not surprisingly, Connecticut lawmakers receive special plates identifying them as members of the House or Senate, with leadership titles prominently displayed. We’re told these plates confer no special treatment, no parking privileges, and no immunity from law enforcement. The word “told” is doing a lot of work here.