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Could alternate energy sources help solve our funding problem?

Posted By Tina Grady Barbaccia On November 6, 2013 @ 5:09 pm In Columns,In the Magazine | No Comments

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It’s time to get creative. With less than a year until our latest surface transportation bill, Moving Ahead for Progress in the 21st Century (MAP-21), expires on Sept. 30, 2014, the Highway Trust Fund (HTF) once again faces insolvency. It’s currently projected to go negative again in 2015, with that balance growing rapidly each year, according to The Hamilton Project.

Increasing the gas tax doesn’t look too promising at this point. And although implementing an effective user-free, road-pricing system could generate between $38 billion and $55 billion every year, according to the U.S. Department of Transportation (DOT), this potential funding mechanism has not moved forward.

When asked whether the time has passed for “mega transportation bills” during the Construction Writers Association (CWA) annual meeting in late October, Dennis Slater, president and secretary of the Association of Equipment Manufacturers (AEM), says, “I am an optimist. The House and the Senate do recognize the need [for transportation funding], but they can’t figure out the funding mechanism. If they are able to find the right funding, with the partisanship we have, they’ll vote against anything. If you say, ‘user fee,’ you can’t get any traction.”

Now the nation is seeing an unprecedented sudden abundance of oil and gas with dramatic production increases. This energy revolution going on in the United States “will be a strong contributor to growth,” says David Zwicke, senior regional economist with the Portland Cement Association.

The shale phenomenon has fundamentally transformed the economy and could be a potential revenue source for the HTF.

However, the method used in creating shale energy – hydraulic fracturing, a.k.a. fracking – faces its own obstacles. Not only is it hotly contested, but regulations also stand in the way. Only about 12 percent is being produced on public lands, so a royalty can’t be attached to it for drilling.

There is “a lot of speculative conjuring” about the United State’s energy boom somehow funding surface transportation, says Toby Mack, former president and CEO of Associated Equipment Distributors, now head of the Energy Equipment and Infrastructure Alliance. “There is a nexus between transportation and energy…a natural relationship between the two, but no one has figured out how to connect it all to help subsidize the road fund.”

Some regulations are important. However, when they impede progress or when we’ve found a potential revenue stream that could move our country forward and possibly aid in fixing our half-trillion dollar infrastructure funding problem, we need to encourage Congress to figure out a way to explore these options because they seem to have dismissed or tabled other options, and time is quickly running out.


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