What Californians Could Build Using the $64 Billion Bullet Train Budget

California’s High-Speed Rail project fails to justify itself according to any set of rational criteria. Its ridership projections are absurdly inflated, its environmental benefits are overstated if not actually net detriments, and its cost, its staggering cost, $64 billion by the latest estimate, overwhelms anyone with even a remote sense of financial proportions. To make this final point clear, here is an assortment of California infrastructure projects that could be paid for with a $64 billion budget.

If these projects were built, instead of the bullet train, Californians would have abundant, cheap electricity, abundant fresh water, and upgraded roads and freeways capable of handling all the traffic a surging economy could possibly dish out.

(1) Build 10 natural gas power plants generating 6.2 gigawatts of electrical output for $5.7 billion.

According to the U.S. Energy Information Administration, a modern natural gas power plant generating 620 megawatts can be built at a capital cost of $568 million. Someday, when electricity storage technologies are inexpensive and safe, the solar age can ripen to maturity, but in the meantime, California’s private energy companies can tap abundant in-state natural gas reserves, enabling California’s public utilities to provide cheap electricity to the public.

Since California’s peak demand rarely exceeds 50 gigawatts, increasing capacity by 12% will drive the price for electricity way down, making California competitive again with other states. Cheap electricity will also obviate the need to force consumers to purchase extremely expensive “energy sipping” appliances that are internet enabled, monitor […] Read More

Resource Development vs. Rationing

California’s decision to “decouple” the amount of revenue their regulated public energy utilities receive from the amount of energy they deliver is hailed by environmentalists as a breakthrough. But the consequences of this decision to enforce artificial scarcity are not fully appreciated. It might be argued that this policy of “decoupling” the amount of money you collect from the amount of value you produce is a dangerous tampering with the natural laws of supply and demand, and is orchestrated by special interests who benefit while the consumer is victimized. Now the NRDC, in a report released last month entitled “Making Every Drop Work: Increasing Water Efficiency in California’s Commercial, Industrial, and Institutional (CII) Sector,” wants to do the same thing to California’s water supply.

Here are two of the recommendations the NRDC makes that make chills run down my spine:

(1) Prioritize water conservation above increasing supply. The State of California should codify the requirement that efficiency improvements precede supply side resources—as it did in the energy sector—to motivate investment in water efficiency and recycling by agencies who might otherwise be awaiting development of traditional water supplies.

(2) Decouple water agencies’ sales from revenue. Water agencies should not need to rely on water sales to assure their fiscal stability. Water agencies should instead adopt a structure that allows them to recover additional money from customers if sales are significantly below projections. This revenue adjustment […] Read More