Cascadia Prospectus

Drawing from $19.9 billion in Prop. 1B voter-appproved bonding authority, a California commission has allocated $3 billion to help fund 79 road, rail, bridge, transit and other transportation projects. The bottom line of this summary shows the projects will cost $8 billion to complete, necessitating the usual cost-sharing with other jurisdictions. Included are more High Occupancy and Toll (HOT) lanes on 1-15 in San Diego, arterial lane additions in Yuba City, various rehab projects for crumbling roads statewide, replacement of an unsafe bridge at Fort Bragg, crossovers between mainline freight train tracks, enhanced grade separation for Los Angeles-region commuter rail, rehab and addition of inter-city train tracks at L.A's downtown station, second-phase seismic upgrade work on the San Francisco-Oakland Bay Bridge, and microwave vehicle detection systems at 20 locations around Bakersfield to analyze traffic patterns and develop computer models to assess current and future highway system needs.

With the state's broader transportation needs in mind, officials say the $3 billion California Transportation Commission allocation is a step in the right direction but that there remain another 121 high-priority projects identified in the state's Goods Movement Action Plan, requiring another $47 billion. That's more than double the Prop 1B kitty, and the Goods Movement Action Plan only represents a portion of needed infrastructure projects. In their announcement (second link, above) officials say private capital will need to be part of the transportation funding mix.

California's transportation network is indeed vast. But the state's need for private partners to finance, fix and build roads, bridges and transit isn't unique. Many others are in the same situation. The federal gas tax trust fund is expected to go bankrupt next year. Political impetus for hiking federal or state gas taxes is nearly zero, thanks to rising gas prices and the economic slowdown. Gas tax revenues are levelling off anyway, as cars get better and better mileage. In many metro regions, tax fatigue is widespread. Yet the squeeze comes from the other end, too. Officeholders know they can't shirk responsibility for worn-out, overburdened roadways and in metro regions, for major transit improvements. It's all going to cost billions upon billions. New variable-rate tolling strategies are key to mananging traffic congestion, and the revenues will help fund roads, bridges, and transit. But there'll still be big funding gaps. Simply going hat in hand to the feds, the statehouse and the voters won't cut it anymore.

Fortunately, private resources for transportation investment are vast. U.S. Department of Transportation Sec. Mary Peters estimates there's $400 billion in private investment to be tapped by states and regions for road, bridge and transit projects. But to do so will require that states lay out the welcome mat. That's beginning to happen around the U.S., including the West Coast, where from Baja to British Columbia a slew of mobility improvements are urgently needed to support the economy and maintain quality of life. These should be paired with "Green Highways" improvements that Cascadia Center and others have championed.

Democratic California Assembly Member Anna Caballero (pictured, right) writes in the San Jose Mercury News that private partners can provide $100 billion of the state's $500 billion in overall infrastructure needs (transportation, utilities, public facilities) in the next 20 years.

As Gov. Arnold Schwarzenegger has recognized, California should be building bridges, roads, rail transit - or schools, libraries and fire stations - the way they are built in many places around the world. Using public-private partnerships, governments join with businesses to finance, design, construct, and sometimes operate and maintain, public facilities. It pays off in lower costs, better design, faster construction and better performance.....(officials) could employ partnerships on a (grand) scale: the proposed $4.7 billion extension of BART to San Jose; the realignment of the treacherous Highway 152 east of Gilroy; or making Caltrain an electric railway.

Los Angeles Mayor Antonio Villaraigosa, who also serves on the Metropolitan Transportation Authority (MTA) of Los Angeles County board, details in this recent press release the gathering impetus for private partners on LA transit projects. The backdrop: The MTA board has identified 23 transit projects that would increase ridership by 122,000 each year and cost up to $30 billion. The city council has adopted a motion commissioning a report on potential private finance options for the incomplete Purple Line Subway to the Sea, and other light rail and bus rapid transit projects. The MTA recently approved a motion of its own, sponsored by its vice-chair, Villaraigosa, requesting preliminary proposals for private finance plans on specific transit projects. This will lead to an MTA board decision this July on proceeding with formal requests for proposals (RFPs). More here from KNBC-TV. Under the plan, the MTA and its labor unions would continue to handle maintenance and operations of transit, while private partners would be eligible to head finance, design, construction and construction management of transit extenstions and additions.

How it will all shake out in LA remains to be seen, but it's significant that the mayor, city council and Metro board acknowledge private capital can help meet the region's bracing transportation needs. There's ample precedent, according to the mayor's office.

The Mayor's motion is partially based on successful private efforts to revamp public transit throughout the United States and around the world. In London, a public-private partnership increased the capacity of the city's transportation system by 20 percent and reduced costs by 17 percent. A similar model in Vancouver boosted rapid transit capacity by 33 percent -- the equivalent of ten 11-mile lanes on city streets. In the US, public-private partnerships are being explored as a potential way to fund and build a new three-mile connection between Oakland International Airport to the Bay Area Rapid Transit system; a 5.4-mile extension of Houston's rail service; and operational improvements to Denver's commuter rail and bus stations.

In Metro's draft long-range transportation plan, agency CEO Roger Snoble (right) neatly ties together growth, mobility challenges, and private investment in transportation.

...The job of Metro is to make sure that mobility is maintained and improved in the face of growth in population and in the number of cars and trucks in the County. Population is expected to increase by another 2.4 million by 2030, while the number of vehicles has surpassed 7 million a day....No single solution works. It is a multi-pronged approach that includes the Metro Freeway Service Patrol, traffc signalization, freeway ramp metering, carpool lanes, intersection improvements and expanding public transit and other rideshare options that have staved off gridlock.

It is the right approach, but we have to do more. A lot more. We are falling short of the resources necessary to fund many of the critical projects needed for congestion relief and air quality improvements. And neither Sacramento nor Washington can be counted on to plug the shortfall.....we need to look to new ways of increasing transportation revenues. Public-private partnerships can stretch limited public funds. Joint development in transit corridors, congestion pricing, and developer mitigation fees are just some of the other options Metro is exploring with a renewed sense of urgency.

The new breed of private funding partners are a varied cast with which state and regional governments are becoming more familiar. Each state and region can pick and choose which players to deal with. Governments can and should retain ownership and fee/fare authority over their roads, bridges and transit systems. But those tolls and fares are a steady source of revenue with which to pay back private investors - who, unlike taxpayers these days - are ready to ante up, again and again.

There are a few different types of dance partners. Sovereign investment funds? Ah....thanks but no thanks. Privately held infrastructure funds, like, say, Macquarie, or Goldman Sachs? Yeah, maybe. Especially if on transportation projects they can partner with public employee union and construction trade union pension funds. This last group is attracting growing attention for investments made in transportation projects around the world, either directly, or through private infrastructure funds.

We'll have more on that in coming posts.

RELATED:

"Report On The Transportation Innovative Partnership Program," Washington State Transportation Commission, 1/07;

"Strategic Growth Plan: Performance-Based Infrastructure," Office of Gov. Arnold Schwarzenegger, CA, 1/9/08;

"Residents Agree -- Public Infrastructure Projects Need Boost From Public Private Partnerships, Bay Area Council Poll Shows," PublicWorks.com, 4/16/08;

"Train Builders Meet To Seek Private Investment For California Groundbreaking Plan For High-Speed Trains," Business Wire, 3/26/08;

"High Speed Rail Bonds Heading For Ballot," SF Chronicle, 4/20/08.

Last week's fast foot ferry demo and regional foot ferry discussion forum in Seattle, organized by Cascadia Center, stoked the fires again. KOMO 4 TV, The Kitsap Sun and The Peninsula Daily News all weighed in with coverage. Participants came away energized by the ride on All American Marine's 50 mph River Gorge Explorer (right); determined to find a way to fund a regional network of state-of-the-art passenger-only ferries; and understanding that Puget Sound's health must be maintained at the same time. The common thread is the huge population growth headed our way in coming decades. Before we delve into last week's events, let's set the stage.

Off, Then On Again

The speedy passenger-only state ferry running between Bremerton and Seattle several years ago was a great ride but the heavy wake impact on shoreline properties led Rich Passage homeowners to sue, successfully ending the route. The ferry used then and a companion model are now being sold because the cash-starved state system is getting out of passenger-only ferry operations. Washington State Ferries is still operating a troubled, and badly aging fleet of car ferries.

Opportunities abound for local and regional operators of passenger-only ferries. The Port of Kingston will be launching a route to and from Seattle with a $3.5 million federal grant tied to variable-rate tolling SR 520, and possibly another $900,000 from the state. One-way fares will be about $13 and the Port predicts the route could be profitable as soon as four years out. King County's new passenger-only ferry district relies on a small hike in the property tax. They'll operate two current routes (between downtown and West Seattle and Vashon Island) and test out several more. Meanwhile, the Puget Sound Regional Council is deep into a study of how best to organize and fund a regional passenger-only ferry system, and Kitsap County will take delivery next year of a new low-wake high-speed foot ferry to be tested on the Bremerton-Seattle run. All eyes will be on Rich Passage.

Staggering Growth = New Marine Highway Plan

To top it all off, it's becoming clearer every week, that with 1.7 million newcomers expected by 2040 and as many as four million more by 2100 according to the Seattle Times, our region's approach to marine transportation needs to focus at least as much on vehicle-free passenger vessels as car ferries. So the idea of a regional passenger-only ferry network run by a consortium on cities, counties, ports, tribes and private operators is gradually moving from the "what if?" stage to the "how to."

A Regional Approach

In early December, at a summit on the state's underfunded and decaying car ferry system, Cascadia Center presented a draft interlocal agreement for regional passenger-only ferries. Bremerton Mayor Cary Bozeman (below, left) also then floated the idea of developing a joint funding vehicle for Puget Sound cleanup and passenger ferries. Little more than a week later, one of the state's mothballed 350-seat passenger ferries was pressed into service between Port Townsend and Seattle, after Port Townsend's economy reeled from the sudden forced retirement of the aged car ferry connecting it with Keystone, on Whidbey Island. The temporary holiday season run between Port Townsend and Seattle proved wildly popular though economically unsustainable due to fuel costs of the big boat, and heavily subsidized fares.

"Salish Sea Express"

Cascadia Center Director Bruce Agnew stoked the buzz in February with a Seattle Post-Intelligencer Sunday op-ed titled, "Imagine A Network of Foot Ferries."

In it, he outlined a proposed regional compact to share resources and best practices to run foot ferries on the Salish Sea, the Native name for Puget Sound. Following Bozeman's lead, he also proposed this be coupled with more resources for preserving the Sound's water quality as growth and development take their toll.

Would You Leave Your Car Behind?

All this was the focus of a special gathering last week in Seattle, replete with a demonstration ride on a hot rod foot ferry. The sleek, 70-seat low wake River Gorge Explorer was manufactured by All American Marine of Bellingham as an eco-tour boat for the Tennesee Aquarium. A 149-seat version with a lower wake will be delivered by All American to Kitsap Transit next year for test runs between Bremerton and Seattle, through Rich Passage. The half-hour excursion on Elliot Bay last week left many riders convinced that demonstration runs across Puget Sound for commuters and leisure travellers would be a phenomenal sales tool. All American Marine CEO Matt Mullet agreed, saying special lease arrangements could make that possible.

In addition to Vashon to Seattle and West Seattle to Seattle, it's not hard to envision low wake fast foot ferries winning large riderships on other routes. Such as Southworth-Seattle, Kingston-Seattle, Everett-Seattle, Bremerton-Seattle, Kirkland-UW (on Lake Washington), Bainbridge-Des Moines (Sea-Tac Airport), and Vancouver-Seattle. For commuters especially, last mile connections would be key.

At the passenger-only ferry forum hosted last Thursday May 8 by Port of Seattle Commissioner Bill Bryant in the Port's meeting chambers, and organized by Cascadia Center, Bremerton Mayor Bozeman made the case for Puget Sound clean-up and more regional foot ferries, together:

Our ferry system should look a lot different. Should we be transporting people across Puget Sound, not cars? I think the proportion should be at least equal. At the same time, the environmental quality of this body of water is crucial. These two issues can come together, and they should.

Dan O'Neal, a board member of the Washington State Transportation Commission, said to the gathering:

There's a lot of enthusiasm for passenger-only ferries. We have an auto-centric ferry system, and you have to wonder if that's sustainable, given the costs of construction and operations of car ferries. But we don't want a range of different passenger-only ferry jurisdictions. We need a regional overlay.

Regional MVET: A Starting Point For Discussions

In a memo prepared for the event, Cascadia's Agnew states that a good starting point for the funding conversation is a voter-approved regional motor vehicle excise tax of $50 with a healthy percentage going for:

As a non-profit, Cascadia Center does not advocate specific legislation. We traffic in ideas. As such, we'll be conducting interviews of key stakeholders on regional funding options and governance framework for passenger-only ferries so that city, county and port elected officials bring forth their own unified proposal to the legislature in 2009.

You can get a good sense of the possibilities for routes and funding from this April 2008 consultant report prepared for the Puget Sound Regional Council's passenger-only ferry study. Pages 5-1 to 5-9 discuss federal, state, private and farebox funding options. Skeptics should take a close look. This is hardly a pipe dream. Like all our region's other transportation funding challenges, it's not a matter of scant resources; but rather vision, and leadership.

Here's a pretty safe bet. As the teeming hordes continue to descend upon the Seattle region, we'll be seeing more passenger-only ferries on Puget Sound in coming years, not less. One way or another.

RELATED:

Cascadia Prospectus Marine Transportation archive.

The May/June 2008 issue of Mother Jones is all about "The Future Of Energy," and one must-read article is "The Seven Myths Of Energy Independence," by Paul Roberts, author of "The End Of Oil."

Roberts argues that energy security is a far more achievable and strategic goal for the United States than energy independence, and the goal should be "massive increases in energy efficiency," particularly in the transportation sector. With that in mind, he details some of the reasons why plug-in hybrid electric vehicles (PHEVs) hold such great promise.

....saving energy is almost always cheaper than making it: There is far more oil to be "found" in Detroit by designing more fuel-efficient cars than could ever be pumped out of (the Alaskan National Wildlife Refuge). And because transportation is the biggest user of oil--accounting for 7 of every 10 barrels we burn--any significant reduction in the sector's appetite has massive ramifications....if we persuaded carmakers to switch to plug-in hybrids, we could cut our oil demand by a staggering 9 million barrels a day, about 70 percent of our current imports.

Such a shift would impose massive new demand on an electric grid already struggling to meet need, but plug-in hybrids actually stretch the grid's existing capacity. Charged up at night, when power demand (and thus prices) are low, plug-in hybrids exploit the grid's large volume of unused (and, until now, unusable) capacity. Such "load balancing" would let power companies run their plants around the clock (vastly more cost-effective than idling plants at night and revving them up at dawn); as important, it would substantially boost the grid's overall output.

According to the Department of Energy, with such load balancing, America's existing power system could meet current power demands and generate enough additional electricity to run almost three-quarters of its car and light-truck fleet. That alone would be enough to drop oil consumption by 6.5 million barrels a day, or nearly a third of America's current demand.

Roberts also explains that environmental benefits will accrue from broader adoption of PHEVs even before much of the nation's electricity is produced from renewables rather than fossil fuels.

.....kilowatt for kilowatt, turning fossil fuels into electricity in massive centralized power plants and then putting that juice into car batteries is more efficient than burning fossil fuels directly in internal combustion engines, and thus generates fewer CO2 emissions per mile traveled. (Our existing fleet generates a third of America's CO2 emissions.) The DOE found that replacing three-quarters of the U.S. fleet with plug-in hybrids would cut vehicle CO2 emissions by 27 percent nationwide - 40 percent or more if the country's power system were upgraded to match California's low-carbon grid. And once the new fleet is in place, there is nothing stopping us from upgrading our power sources to truly renewable systems.

In a major report released last month titled "Plugged In: The End Of The Oil Age", the World Wildlife Fund also zeroes in on why broader adoption of PHEVs should be an urgent priority. Here's the full report, and an executive summary.

SAVE THE DATE - Sept. 4th & 5th: Make sure to save the dates September 4th and 5th of this year for Cascadia Center's 5th Annual TransTech Conference at Microsoft's Redmond campus. It's titled, "Beyond Oil: Transforming Transportation." A top-drawer cast of policy-makers and experts will speak on PHEVs, alternative fuels, and more. Event and registration information here.

RELATED:

Cascadia Center's "Beyond Oil" resource page.

Okay - so you already knew that pink was the new black and real estate was the new sex. Now infrastructure is sexy. So say Forbes, The Guardian, and the Wall Street Journal.

We're not talking about your grandfather's municipal bonds either. Operating costs and necessary maintenance and improvements are something every homeowner understands - all too well. You may be able to meet all these needs without assuming debt beyond your mortgage. Or you might just have to endure an avocado-hued fridge, pastel yellow formica counter, midget sink, pinched shower stall and shaky deck for far longer than you'd like. Cue the violins. Life is hard. But suppose you owned a worn-down state ferry fleet or highway system and were responsible to millions of people?

As a government rather than a household, you've got way more income, but it's spread thinner and there's major pushback on "revenue enhancement." An aging upper rear deck attached to a private home can be prudently roped-off until money is available for repair. No one will suffer as a result. But an elderly, disaster-prone bridge or elevated roadway, or a chronically dangerous maldesigned highway, or ancient car ferries with rusting hulls cannot easily be decommissioned at a moment's notice. Yet, neither should the risks of continued operation be borne for long.

Squeezed by rising costs, constricted cashflow and often, gobs of existing debt, owners can't keep borrowing to operate, maintain, improve or build public infrastructure. Nor, as they are reminded by the period stick in the eye from voters, can they count on raising taxes whenever they'd like. So to keep pace with the infrastructure challenges stemming from wear and tear, vibrant states and regions with real leaders are increasingly turning to private investors in carefully-structured, project-specific partnerships.

Public employee union pension funds are a fast-growing part of the mix within private infrastructure investment groups. The focus is on steady, long-term returns, not "grab and go" profit-taking. Scrutinizing their courtiers carefully are the governments which own the assets, rights of way or greenfield properties around which the public-private deals are struck. They have to steer a deliberate course to ensure the public interest is served. But doing it all the old way isn't an option anymore. Not with the growing gap between basic needs and public resources. There's an estimated $400 billion in private resources to be tapped for U.S. infrastructure, and capital formation is accelerating.

Here are a few signposts on the road to the future.

Forbes pronounces "Infrastructure Is Sexy," highlighting the formation of two more new funds that have raised more than $10 billion for first-round investments in the sector. Morgan Stanley has secured $4 billion for a new infrastructure fund that will invest in transportation, energy, utilities and communications; and a similar General Electric/Credit Suisse-led group has marshalled $5.6 billion.

Infrastructure assets such as utilities, toll roads and airports are attractive to financial bidders like banks and pension funds because of their stable cash flow despite having lower growth rates than other private equity opportunities..."The successful fund-raising underscores the particular demand for infrastructure investment, and broadly, for alternative assets that generate long-term stable cash flows," said James Gorman, co-president of Morgan Stanley (pictured above, right). The company said it raised capital in North America, Europe, Australia, the Middle East and Asia in to reach the $4 billion mark, which far exceeds the fund's initial target of $2.5 billion.

Investors ran the gamut from pension funds, insurance companies and high-net-worth individuals to Morgan Stanley employees. Morgan Stanley infrastructure's investment team will operate out of New York, London, Hong Kong and Beijing. Morgan Stanley had a total of $577 billion in assets under management as of February 29, 2008.

Across the pond, The Guardian explains "How Infrastructure Got Sexy In The City."

With more esoteric investments becoming unfashionable, it is easy to understand why longer-term funding of real, if prosaic assets has become more appealing. They are often quasi-monopolies with virtually guaranteed inflation-linked returns. They are also pretty much recession-proof - people still use bridges and electricity even in hard times.

The market is also ripe for investment. In the developed world, money is needed to replace ageing infrastructure, and there are growing demands for roads, water and electricity. Meanwhile, public finances are under increasing strain because of ageing populations. In emerging economies, the need is even greater to build huge infrastructure projects from scratch. Then there are the broader global trends: the world's population is expected to add another one billion people over the next decade, there is increasing urbanisation and the challenge of climate change. In a lengthy recent report, the Organisation for Economic Cooperation and Development said $53 trillion of investment is needed in infrastructure by 2030.

In "Why U.S. Highways Are Falling Into Private Equity Hands," Mayer Brown partner John Schmidt explains to The Wall Street Journal's "Deal Journal" blog:

Every day you pick up the paper and you find that a major fund has raised more money than it expected to, or is raising a new fund. Capital is being raised in an almost amazing way, with funds that raised $2 billion before now pulling in $4 billion. The infrastructure of one of the strongest economies in the world has to be one of the best long-term investments in the world. Most of the money for the private equity investments is coming from big pension funds. There's a lot of competition and the gestation period for the sector has been long.

For more than a year, Cascadia Center has continued to recommend that public employee and union pension funds be tapped as partners to help fund pressing regional transportation infrastructure needs in Puget Sound. That does not mean that every sort of infrastructure investment is equally attractive to a pension fund. As Robert Poole of the Reason Foundation observes (second article from top here), because pension funds are already tax exempt, they are unlikely to buy the lower-interest tax-exempt bonds issued by a public tolling authority. However, as Poole emphasizes, pension funds are getting in the transportation infrastructure game by buying direct equity stakes in revenue-producing facilities or by joining with private infrastructure investment groups in equity or lease deals. That's something for policy-makers here to consider, going forward.

Washington state must confront a big whammy. There are tight limits on available public funds. This is a permanent, not temporary condition, even with the odd transportation tax measure passing now and then. Yet according to the state there is $2 billion of needed work on I-5 in Seattle plus $1.84 billion more required for fixes to deadly State Route 2 in Snohomish County. And while studies grind on, the effort to raise money for replacement of the badly aging fleet of state car ferries is far from complete. Funds for crucial improvements to car ferry terminals also remain unsecured. The state car ferry fleet is the nation's largest and the boats and facilities - by an act of the legislature - are part of our state highway system. In Pierce County, unfunded major road projects include completion of the Cross-Base Highway, and extension of SR 167 to the Port of Tacoma.

Seattle Times editorial page editor James Vesely suggested last weekend that the region may have already resigned itself to playing small ball for a while on transportation infrastructure. He's right to raise the point. Maybe, following the defeat of last fall's controversial roads and transit ballot measure, some more stasis has to precede bold action. But what's being contemplated is a transit-only measure, centered on modest improvements - over the course of more than a decade - to a starter light rail system that won't begin operating until next year. That's hardly all the doctor ordered. We've got a 52 percent increase in the four-county population due by 2040 (up by 1.7 million from 3.2. million in 2000), and as many as four million newcomers expected by the turn of the century. The ultimate costs of wearily muddling through will be far higher than doing things a new way. That new way must include private capital for roads and transit; transit that truly competes on travel time and reliability; congestion pricing to ration limited peak-hour highway capacity; and a federal carbon tax to drive broad adoption of clean vehicle technology.

Susan Gilmore's article in today's Seattle Times on the Island Home ferry planned for the Port Townsend-Keystone route was spot on in describing how nice the ferry is for riders. Over the Memorial Day weekend, my family had a chance to ride on the new Island Home ferry (as well as the older ferry that also serves the route) in Massachusetts, from Woods Hole to Martha's Vineyard. We came away impressed.

As the Times' piece indicates, there is a special deck-top area for free wireless Internet connection. Other amenities include comfortable seats (with cupholders!), quiet areas on the first passenger deck, and a well-stocked snack area that handled the packed crowds quickly with dual stations. Unlike Washington State Ferries policy, leashed dogs were surprisingly allowed throughout most of the passenger areas. And while there were many canines, there were no problems.

Unlike the older boat which has to back out of the dock, the Island Home has twin helms like WSF's, which allows for quicker turnarounds. The 60-car boat carries 1,200 passengers (which seems a lot for the Port Townsend-Keystone run) and some of the crew I interviewed said the skippers complain about the height of the vessel catching more wind, making it more difficult to maneuver in tight quarters. The wind was blowing a steady 20 knots when we rode it but the skipper did not seem to have a problem. The vessel is noted for its sturdiness and smooth sailing in rough weather. This will be a strength when crossing often-turbulent Admiralty Inlet. The route provides an important connection for business and tourism. A major road and another car ferry connect mainland Western Washington to scenic Whidbey Island. The car ferry from Keystone, on Whidbey's southwest side, connects at Port Townsend with a destination Victorian town which also serves as eastern gateway to the Olympic Peninsula.

The Island Home is designed by Elliott Bay Design Group of Seattle. New boats had to be selected after WSF's aging Steel Electric-class ferries were taken out of service last fall for safety reasons. The state decided on the Island Home boats last month, and hopes to have two of the ferries in service on the Port Townsend-Keystone route by 2010. This is instead of initial plans for a new car ferry modeled after a more weather-sensitive boat now being leased from Pierce County. Riding the Island Home is a great experience. All in all, the Island Home ferries should be a welcome addition to Puget Sound.

Similar to some other automakers, the vehicles currently on offer from Dodge-Chrysler-Jeep include quite a few, such as SUVs, minivans and pickup trucks, that aren't really tooled for the motoring future that's already unfolding. That's a future with high gas prices that will be staying high, sharply slowing sales of gas-guzzling pick-ups and SUVs, and consumers ready to buy plug-in hybrid electric vehicles by the boatloads if automakers can deliver them with reliable lithium ion batteries and at prices of, say, $30,000 or less.

That price point is apparently the aim for GM's Chevy Volt, a PHEV to watch.

So with gas now pushing past $4 a gallon, what does Dodge-Chrysler-Jeep do? Accent their plans for future-facing vehicles? No. They unveil a promotional campaign to try to sell more of their energy hogs with a three-year subsidy to buyers to keep their gas costs at $2.99 a gallon. New York Times syndicated columnist and energy inquisitor Thomas Friedman has a pointed take.

....reckless initiatives like the Chrysler-Dodge-Jeep offer to subsidize gasoline for three years for people who buy its gas guzzlers are the moral equivalent of tobacco companies offering discounted cigarettes to teenagers.

I can't say it better than my friend Tim Shriver, the chairman of Special Olympics, did in a Memorial Day essay in The Washington Post: "So Dodge wants to sell you a car you don't really want to buy, that is not fuel-efficient, will further damage our environment, and will further subsidize oil states, some of which are on the other side of the wars we're currently fighting. ... The planet be damned, the troops be forgotten, the economy be ignored: buy a Dodge."

Friedman goes on to approvingly cite an economist's suggestion there actually be a price floor for unleaded regular gas of $4 per gallon, supported by mandatory increases in the federal gas tax if the market price goes lower, and with compensatory payroll tax deductions for those earning under $80K per annum. Whatever one thinks of the proposal, Friedman's central point is that the government needs to send a clear message the days of cheap oil and cheap gas are long gone and that consumers and fleet owners need to look ahead, to new technologies and fuels, not behind. He writes:

We need to make a structural shift in our energy economy. Ultimately, we need to move our entire fleet to plug-in electric cars. The only way to get from here to there is to start now with a price signal that will force the change.

Author Paul Roberts and the World Wildlife Fund report that the environmental benefits of plug-in electric cars accrue even if the electricity comes from fossil fuels. But as they both add, the cleaner the electricity, the greater the benefits of PHEVs and all-electric vehicles. That's why the Pacific Northwest is an ideal proving ground for a consumer-focused PHEV pilot project. Here's where clean hydro-power already reigns, where renewable energy sources are beginning to ramp up, and - deep breath, please - where nuclear power is slowly gaining traction, which Seattle Times editorial page editor James Vesely discussed last weekend, and his colleague Kate Riley detailed last spring. Even those fusty authoritarians at Wired are singing the praises of nuclear, both last week, and in greater detail as far back as 2005.

There's something happening here. Writing in the Wall Street Journal, R. James Woolsey, director of the CIA for president Bill Clinton, and Paula Dobriansky, current Undersecretary of State for Democracy and Global Affairs (pictured at right), herald the coming clean technology revolution in transportation. They stress the need for broad adoption of PHEVs running on clean electricity, and advanced second-generation biofuels made from sources including forestry and farming waste, and grasses. Also key, they write, are amped-up support from the feds and leading U.S. corporations for more production of electricity from nuclear technologies and from coal-fired power plants that sequester carbon. That last approach is something at the heart of a Washington-state based research project that should be allowed to continue, over misguided objections, as the Times' Riley recently opined.

Green-powered plug-in hybrids mesh with congestion pricing to ration peak hour highway capacity and carefully crafted public-private partnerships to fund necessary transportation infrastructure improvements. Public transit that can truly compete on travel times and convenience is part of the equation, as are expanded corporate transit, para-transit, and telecommuting. All are strategies to help manage growth, ease mobility and maintain environmental quality in burgeoning metro regions. Nobody said this would be easy.

Advanced navigational systems will help reduce congestion and pollution, too. That topic, along with congestion pricing and PPPs, will be covered at the June 26 West Coast Tolling And Traffic Management Workshop that our Cascadia Center will sponsor at Bell Harbor Conference Center on Seattle's waterfront. And save the date for our Sept. 4 and 5 conference, "Beyond Oil: Transforming Transportation."