    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

                         FREIGHT AND PASSENGER RAIL IN

                        AMERICA'S TRANSPORTATION SYSTEM
    =======================================================================

                                    (113-4)

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON

                           RAILROADS, PIPELINES, AND

                              HAZARDOUS MATERIALS

                                     OF THE

                                  COMMITTEE ON

                       TRANSPORTATION AND INFRASTRUCTURE

                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 MARCH 5, 2013

                                   __________

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                 Committee on Transportation and Infrastructure

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                 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      BILL SHUSTER, Pennsylvania, Chairman
    DON YOUNG, Alaska                    NICK J. RAHALL, II, West Virginia
    THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
    HOWARD COBLE, North Carolina         ELEANOR HOLMES NORTON, District of
    JOHN J. DUNCAN, Jr., Tennessee,          Columbia
      Vice Chair                         JERROLD NADLER, New York
    JOHN L. MICA, Florida                CORRINE BROWN, Florida
    FRANK A. LoBIONDO, New Jersey        EDDIE BERNICE JOHNSON, Texas
    GARY G. MILLER, California           ELIJAH E. CUMMINGS, Maryland
    SAM GRAVES, Missouri                 RICK LARSEN, Washington
    SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
    CANDICE S. MILLER, Michigan          TIMOTHY H. BISHOP, New York
    DUNCAN HUNTER, California            MICHAEL H. MICHAUD, Maine
    ERIC A. ``RICK'' CRAWFORD, Arkansas  GRACE F. NAPOLITANO, California
    LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
    BLAKE FARENTHOLD, Texas              TIMOTHY J. WALZ, Minnesota
    LARRY BUCSHON, Indiana               STEVE COHEN, Tennessee
    BOB GIBBS, Ohio                      ALBIO SIRES, New Jersey
    PATRICK MEEHAN, Pennsylvania         DONNA F. EDWARDS, Maryland
    RICHARD L. HANNA, New York           JOHN GARAMENDI, California
    DANIEL WEBSTER, Florida              ANDRE CARSON, Indiana
    STEVE SOUTHERLAND, II, Florida       JANICE HAHN, California
    JEFF DENHAM, California              RICHARD M. NOLAN, Minnesota
    REID J. RIBBLE, Wisconsin            ANN KIRKPATRICK, Arizona
    THOMAS MASSIE, Kentucky              DINA TITUS, Nevada
    STEVE DAINES, Montana                SEAN PATRICK MALONEY, New York
    TOM RICE, South Carolina             ELIZABETH H. ESTY, Connecticut
    MARKWAYNE MULLIN, Oklahoma           LOIS FRANKEL, Florida
    ROGER WILLIAMS, Texas                CHERI BUSTOS, Illinois
    TREY RADEL, Florida
    MARK MEADOWS, North Carolina
    SCOTT PERRY, Pennsylvania
    RODNEY DAVIS, Illinois
    VACANCY
                                    ------                                7

         Subcommittee on Railroads, Pipelines, and Hazardous Materials

                       JEFF DENHAM, California, Chairman
    JOHN J. DUNCAN, Jr., Tennessee       CORRINE BROWN, Florida
    JOHN L. MICA, Florida                DANIEL LIPINSKI, Illinois
    GARY G. MILLER, California           JERROLD NADLER, New York
    SAM GRAVES, Missouri                 ELIJAH E. CUMMINGS, Maryland
    SHELLEY MOORE CAPITO, West Virginia  MICHAEL H. MICHAUD, Maine
    CANDICE S. MILLER, Michigan          GRACE F. NAPOLITANO, California
    LOU BARLETTA, Pennsylvania           TIMOTHY J. WALZ, Minnesota
    LARRY BUCSHON, Indiana               ALBIO SIRES, New Jersey
    BOB GIBBS, Ohio                      ELIZABETH H. ESTY, Connecticut
    PATRICK MEEHAN, Pennsylvania         PETER A. DeFAZIO, Oregon
    RICHARD L. HANNA, New York, Vice     MICHAEL E. CAPUANO, Massachusetts
        Chair                            STEVE COHEN, Tennessee
    DANIEL WEBSTER, Florida              DINA TITUS, Nevada
    THOMAS MASSIE, Kentucky              NICK J. RAHALL, II, West Virginia
    ROGER WILLIAMS, Texas                  (Ex Officio)
    TREY RADEL, Florida
    SCOTT PERRY, Pennsylvania
    BILL SHUSTER, Pennsylvania (Ex
        Officio)

                                    CONTENTS

                                                                       Page

    Summary of Subject Matter........................................     v

                                   TESTIMONY

    Edward R. Hamberger, President and Chief Executive Officer,
      Association of American Railroads..............................     5
    Hon. Paula J. Hammond, P.E., Secretary of Transportation,
      Washington State; Chair, American Association of State Highway
      and Transportation Officials High-Speed and Intercity Passenger
      Rail Leadership Group; and Chair, States for Passenger Rail
      Coalition......................................................     5
    James A. Stem, Jr., National Legislative Director of the
      Transportation Division of the Sheet Metal, Air, Rail,
      Transportation Union (SMART)...................................     5
    Hon. Joseph H. Boardman, President and Chief Executive Officer,
      Amtrak.........................................................     5

              PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

    Hon. Steve Cohen, of Tennessee...................................    37

     PREPARED STATEMENTS AND ANSWERS TO QUESTIONS FOR THE RECORD SUBMITTED
                                  BY WITNESSES

    Edward R. Hamberger:

        Prepared statement...........................................    39
        Answer to question from Hon. Lou Barletta, a Representative
          in Congress from the State of Pennsylvania.................    57
        Answers to questions from Hon. Michael H. Michaud, a
          Representative in Congress from the State of Maine.........    57
        Answers to questions from Hon. Corrine Brown, a
          Representative in Congress from the State of Florida.......    58
    Hon. Paula J. Hammond, P.E.:

        Prepared statement...........................................    60
        Answer to question from Hon. Jerrold Nadler, a Representative
          in Congress from the State of New York.....................    66
        Answers to questions from Hon. Corrine Brown, a
          Representative in Congress from the State of Florida.......    67
    James A. Stem, Jr.:

        Prepared statement...........................................    72
        Answers to questions from Hon. Michael H. Michaud, a
          Representative in Congress from the State of Maine.........    79
        Answers to questions from Hon. Corrine Brown, a
          Representative in Congress from the State of Florida.......    81
    Hon. Joseph H. Boardman:

        Prepared statement...........................................    83
        Answers to questions from Hon. Jeff Denham, a Representative
          in Congress from the State of California...................    93
        Answers to questions from Hon. Corrine Brown, a
          Representative in Congress from the State of Florida.......    97
        Answers to questions from Hon. Jerrold Nadler, a
          Representative in Congress from the State of New York......   103

                           SUBMISSIONS FOR THE RECORD

    Edward R. Hamberger, President and Chief Executive Officer,
      Association of American Railroads, inserts for the record......17, 35
    Hon. Jerrold Nadler, a Representative in Congress from the State
      of New York, request to submit the Northeast Corridor
      Infrastructure and Operations Advisory Commission's report
      entitled, ``Critical Infrastructure Needs on the Northeast
      Corridor,'' (January 2013)................................ \\

                             ADDITION TO THE RECORD

    American Chemistry Council, written statement....................   105

    ----------
    \\ The report entitled ``Critical Infrastructure Needs on
      the Northeast Corridor'' can be found online at http://www.nec-
      commission.com/wp-content/uploads/2013/01/
      necc_cin_20130123.pdf.
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                         FREIGHT AND PASSENGER RAIL IN

                        AMERICA'S TRANSPORTATION SYSTEM

                                  ----------

                             TUESDAY, MARCH 5, 2013

                      House of Representatives,
                  Subcommittee on Railroads, Pipelines,
                               and Hazardous Materials,
                Committee on Transportation and Infrastructure,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 11:04 a.m. in
    room 2167, Rayburn House Office Building, Hon. Jeff Denham
    (Chairman of the subcommittee) presiding.
        Mr. Denham. The subcommittee will come to order. First let
    me welcome our distinguished witnesses and thank them for their
    testimony today. We invited you because each of you represents
    a key stakeholder group involved in our Nation's rail industry.
        As you know, passenger and freight rail, coupled with
    railroad suppliers and union workers play important and
    dependent roles in our Nation's economy, and are vital to its
    success. As you all may know, Chairman Shuster and I are
    committed to rail reauthorization this year. I say again,
    ``this year.'' And hopefully, this hearing will be a productive
    start to a bipartisan effort.
        We need to be pragmatic and transparent, and we will need
    all parties to participate in order to deliver the best
    bipartisan product to the House floor. We want to make it a
    point to welcome all ideas from many viewpoints, in order to
    make the most robust and comprehensive reauthorization. We
    thought an educational hearing on our Nation's rail industry
    would be the best way to start and really have a very
    productive conversation.
        Railroads are an integral part of North America's
    infrastructure network and, in turn, our economic
    competitiveness. From the building of the Nation's first rail
    in 1828 until now, both passenger and freight railroads have
    played a central role in our Nation's development. It is
    important to note that the U.S. freight rail system is the
    number one in the world, with our passenger rail system also
    increasing ridership yearly.
        Our witnesses include representatives of freight and
    passenger rail, as well as representatives of States and labor.
    And they will describe their interdependent roles in this
    important industry. Since I don't want to repeat their
    testimony, let me very briefly describe the current Federal
    role in the railroad industry.
        First, the Federal Railroad Administration, a modal
    administration within the U.S. Department of Transportation,
    oversees railroad safety and manages rail infrastructure
    programs. Independent of DOT, there are three Federal
    Government boards: the Surface Transportation Board, which
    administers economic regulations of the rail; the Railroad
    Retirement Board, which manages rail retirement and
    unemployment programs; and the National Mediation Board, which
    administers the Railway Labor Act to ensure interstate commerce
    is not interrupted by railroad labor disputes.
        Finally, Congress also provides support by authorizing and
    subsidizing Amtrak, which operates intercity passenger rail and
    owns a majority of the Northeast Corridor. Our goal for this
    year is to re-examine the Federal Government's role and discuss
    and analyze what has worked in the past, and what needs to be
    reformed.
        The purpose of this is to be an educational hearing. So I
    ask the witnesses and Members to try and save their policy
    preferences for future hearings. Again, I thank the witnesses
    for being here with us today.
        I would now like to recognize Ranking Member Corrine Brown
    from Florida for 5 minutes to make any opening statements she
    may have.
        Ms. Brown. Thank you, Mr. Chairman, and I want to thank you
    for holding this hearing today. I know that you are committed
    to improving our Nation's freight and passenger rail system,
    and I am looking forward to working with you and this Congress
    for important legislation. This hearing will be very helpful to
    our new Members, and a good start in preparing to re-authorize
    the Passenger Rail Investment and Improvement Act.
        I truly appreciate what freight and passenger rail have
    done and will continue to do for our country. And I am pleased
    again to serve as ranking member of the subcommittee for the
    113th Congress. My top priority for rail is to continue to
    increase investment in freight and passenger rail, expand
    passenger and high-speed rail throughout the country, ensure a
    safe workplace, and, most important, put America and the entire
    community back to work.
        I will also continue to fight to ensure minority
    participation in leadership and contracting throughout the
    transportation industry.
        The fact is that railroads are the backbone of the North
    American transportation network. From the building of our
    Nation's first railroad in 1828 to the creation of Amtrak in
    1970, railroads have played a central role in our Nation's
    economic development. Every year, American freight railroads
    invest billions of dollars of their own capital, not taxpayers'
    money, to maintain bridges, lay new tracks, purchase equipment,
    and upgrade signal systems.
        In fact, railroads spend five times more on capital
    expenditures than the average U.S. manufacturer. In 2013,
    railroads plan to spend $24.5 billion in maintenance, growth,
    and modernization of the network.
        Amtrak is also investing, thanks to an increased funding
    authorization by the Passenger Rail Investment and Improvement
    Act of 2008, and provisions that provided appropriations in the
    American Recovery and Reinvestment Act of 2009. In 2012 Amtrak
    carried a record number, 31.2 million passengers, a 55-percent
    increase since 1997. Meanwhile, their request for operation
    assistance has decreased.
        Together, our Nation's freight and passenger rail employs
    about 250,000 people. Railroad suppliers employ about 95,000
    workers. Thanks to these hard-working men and women, we
    literally have the greatest freight rail system in the world. I
    hear this from transportation leaders across the globe. In
    fact, any time you travel, they want to know about our freight
    rail system.
        In addition to easing highway congestion, shifting freight
    from trucks and passengers from cars to rail have substantially
    environmental and energy benefits. Freight trains are at least
    four times more fuel-efficient than trucks, and can move 1 ton
    of freight 436 miles with a single gallon of fuel.
        Is my time up?
        [Laughter.]
        Ms. Brown. In closing, I want to welcome today's panelists,
    especially Mr. Boardman--we should have a witness chair named
    after him for being here so many times. I am looking forward to
    hearing your testimony and your ideas for preparing our rail
    system for the future.
        Thank you very much, and I will yield back my time and ask
    any additional questions at the proper time.
        Mr. Denham. I now call on the chairman of the full
    committee, Mr. Shuster.
        Mr. Shuster. Thank you, Mr. Chairman. I just want to
    welcome the folks here, the witnesses today. Appreciate you
    being here. And I just want to echo what the ranking--
    distinguished ranking member said about--we have the finest
    rail freight system in the world, and we want to make sure that
    it continues to be, that it continues to not have to rely on
    the Federal Government for funding, and that they continue to
    be prosperous and invest 18 to 20 percent of their revenues
    back into the system.
        But also, appreciate the help--the chairman having this
    hearing to not only talk about freight rail, but passenger
    rail. I think it is pretty clear--I have made it pretty clear I
    really want to try to do something to reform Amtrak, to make
    sure that--it may never make a profit, but we need to make it
    move in that direction. I appreciate what--some of the things
    Mr. Boardman has done over his tenure as CEO at Amtrak, but we
    need to sit down--labor, management, Congress--and figure out
    how we need to move forward, and focus on those areas that I
    believe can be--or that are profitable, and build on that, and
    look at other areas that aren't, and figure out ways to correct
    them or spend them or reform them in such a way that we can be
    moving in the right direction.
        I think it is critical that we have passenger rail in this
    country, some places a lot more than others. And, of course, it
    is no secret the Northeast Corridor is one of those places that
    should shine, even more than it does now. And just full
    disclosure, I do not live along the--western Pennsylvania is
    not in the Northeast Corridor. So for those folks that say that
    is, you know, parochial interest, it is not. I think it is of
    interest to anybody who lives in that corridor, that population
    density, that we continue to see significant improvements to
    Amtrak and its operations there, as we move forward.
        So, I am going to be working very closely with the chairman
    as we move forward to do a rail reauthorization bill this year.
        So, Mr. Chairman, thank you for yielding me the time. I
    yield back.
        Mr. Denham. I now call on Mr. Mica, former chair of the
    full committee.
        Mr. Mica. Well, just a minute. First, I want to thank
    Chairman Shuster, Chairman Denham, and Ranking Member Brown for
    conducting this meeting, and doing an assessment from all the
    stakeholders.
        Just 1 second to remind folks that the last time we did a
    rail reauthorization it took us 11 years. And working in a
    bipartisan manner with Mr. Oberstar, we were able to pass the
    current PRIIA legislation we all worked on, which had some good
    elements, the high-speed rail, a whole host of improvements
    that we really need to look at again.
        So, I think it is very important that we work together.
    This could be, I think, one of the most important things that
    we do. We weren't able to get reforms like RIF in the final
    MAP-21. We tried to do that rail section, we had some
    disagreements. But I think that we can resolve those
    differences, so I salute Chairman Denham, Chairman Shuster,
    Ranking Member Brown, and look forward to working with everyone
    as we move this important legislation forward. And thank you.
        Mr. Denham. I would like to again welcome our witnesses
    here today. Our first panel will include: Mr. Ed Hamberger,
    president and CEO of the Association of American Railroads; the
    Honorable Paula Hammond, who holds three titles as the
    secretary of transportation of Washington State, the chair of
    the States for Passenger Rail Coalition, and the chair of
    AASHTO's High-Speed and Intercity Passenger Rail Leadership
    Group; James Stem, national legislative director of the United
    Transportation Union; and once again, our frequent visitor, the
    Honorable Joseph Boardman, president and CEO of Amtrak.
        I ask unanimous consent that our witnesses' full statements
    be included in the record.
        [No response.]
        Mr. Denham. Without objection, so ordered. Since your
    written testimony has been made part of the record, the
    subcommittee would request that you limit your oral testimony
    to 5 minutes.
        Mr. Hamberger, first I would like to take the opportunity
    to recognize you and the association for your participation in
    the Veterans Jobs Caucus and the rail industry's commitment to
    hiring our veterans. Thank you for your efforts. And with that,
    please proceed.

    TESTIMONY OF EDWARD R. HAMBERGER, PRESIDENT AND CHIEF EXECUTIVE
       OFFICER, ASSOCIATION OF AMERICAN RAILROADS; HON. PAULA J.
     HAMMOND, P.E., SECRETARY OF TRANSPORTATION, WASHINGTON STATE;
    CHAIR, AMERICAN ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION
     OFFICIALS HIGH-SPEED AND INTERCITY PASSENGER RAIL LEADERSHIP
    GROUP; AND CHAIR, STATES FOR PASSENGER RAIL COALITION; JAMES A.
    STEM, JR., NATIONAL LEGISLATIVE DIRECTOR OF THE TRANSPORTATION
     DIVISION OF THE SHEET METAL, AIR, RAIL, TRANSPORTATION UNION
       (SMART); AND HON. JOSEPH H. BOARDMAN, PRESIDENT AND CHIEF
                       EXECUTIVE OFFICER, AMTRAK

        Mr. Hamberger. Thank you, Mr. Chairman. It is something
    that we are focused on. One in four employees is a veteran. And
    last year we hired 5,000 returning veterans. Thank you for the
    opportunity to appear before you this morning. Joe Boardman is
    here. Amtrak is a member of the AAR. Joe sits on our board. So
    I will focus my comments on the freight side of the house this
    morning, but I am ready to talk about either side during Q&A.
        If I can impress upon this committee one important salient
    fact about the freight railroad industry, it is this: we are
    privately owned. Unlike highways, barges, and airports, we
    operate on our own right-of-way, which we pay taxes on, which
    we pay to maintain, and which we pay to upgrade. From 1980
    through 2012 we spent $525 billion--``b,'' as in ``boy''--in
    private capital to upgrade and modernize this infrastructure.
    We continue that trend in 2013. Projected spending will be
    $24.5 billion back into the infrastructure.
        And this is the literal foundation over which passenger
    rail operates. Outside of the Northeast Corridor it is the
    foundation for Amtrak moving around the country. So these
    investments are not only for the benefit of our freight
    customers, but they have benefits for passenger movement, as
    well.
        What has this investment meant? Well, first of all, and
    most importantly, it has dramatically improved our safety. 2012
    has been the safest year on record, in terms of accident rate,
    grade-crossing incidents, and, most importantly, employee
    injury rate. In fact, it is safer to work on the freight
    railroads and passenger railroads than in any other mode of
    transportation, and many other industries, including the one
    comparison that I love: It is safer to work on a railroad than
    it is in a grocery store.
        But there are accidents and there are fatalities. We are
    focused on improving our safety, working with labor, and
    working with the Federal Railroad Administration--FRA. We are
    doing lots of research at the Transportation Technology Center,
    where this subcommittee has held hearings in the past. I invite
    you again to travel to Pueblo, Colorado, to see the new
    technologies that we are working on there.
        Second, our investment has paid dividends for a cleaner
    environment. We can move 1 ton of freight almost 500 miles on 1
    gallon of fuel. In fact, Mr. Chairman, it would take just about
    6 gallons to move a ton of freight from your home district to
    the U.S. Capitol. And Ranking Member Brown, it would take about
    a gallon-and-a-half to get something from Jacksonville to here.
        We are, therefore, 75 percent cleaner, in terms of
    greenhouse gas emissions than the trucking industry. If we
    could get just 10 percent of the freight off the highways onto
    the railroads, we would save 1 billion gallons of fuel and 11
    million tons of CO2 not emitted into the air every year. We
    think that that would be a good goal. And, in fact, it is a
    goal of the draft freight rail plan at the Department of
    Transportation.
        Third, freight rail service has never been better. We are
    able to give the best service in history to our customers,
    making them competitive in global markets. But in addition to
    great service, rates for our customers are lower. Railroads are
    moving commodities today at an average rate that is 45 percent
    less than when railroads moved that commodity in 1980.
    Railroads are moving twice as much today as they did in 1980
    for half the cost. That is the impact of the investment our
    freight railroad members have made.
        And I mentioned 1980 to you because none of these successes
    and none of this investment would have occurred were it not for
    the Staggers Rail Act of 1980. In 1980, 25 percent of the
    industry was in bankruptcy. Congress was considering whether or
    not to nationalize the industry. Instead, they passed the
    Staggers Rail Act, which resulted in a balanced regulatory
    system, and has led to this heavy investment, increased
    service, increased productivity, increased safety, and lower
    rates for our customers.
        As you take a look at policies going forward, we strongly
    urge you to avoid enacting policies that would discourage this
    necessary and critical private investment in the rail
    infrastructure--investments that boost our economy and enhance
    our global competitiveness.
        This is my first opportunity to appear before you, Chairman
    Denham. I have been here many times in the past, but I look
    forward to working with you, other members of the subcommittee,
    the full committee, the administration, and, of course, other
    stakeholders, to address the challenges we have in the future.
    Thank you.
        Mr. Denham. Mr. Hamberger, thank you.
        Ms. Hammond, you may proceed.
        Ms. Hammond. Thank you, Chairman Denham and Ranking Member
    Brown, for inviting me to participate. States have a unique
    story to tell. As we sponsor intercity passenger service on
    largely private freight rail networks, we work with Amtrak to
    operate and deliver passenger rail service, and we work with
    our freight railroads to deliver projects. And, in some States,
    we own commuter rail service.
        Today I will talk about Washington's freight rail network
    and our Northwest Amtrak Cascade's passenger rail program. In
    Washington the evolution of railroads have mirrored that of the
    national trends. In 1870, the Northern Pacific began
    construction on its first set of tracks in the Washington
    Territory. And by the turn of the century, railroad's
    connections enabled people in Washington to have rail access to
    commercial centers across North America.
        Today, BNSF Railroad and Union Pacific Railroads are the
    main Class I railroads operating in the State, carrying freight
    and passenger rail. I will talk first about our freight rail in
    Washington State.
        We have a robust freight rail system and a strong
    partnership with Burlington Northern Santa Fe, which owns the
    main line that runs north and south through our State, largely
    along Interstate 5. In addition to that main line, we have 30--
    excuse me, 23 short-line freight routes. Of those short-line
    routes, the State owns the Palouse Coulee City Railroad, a 297-
    mile short-line railroad spanning 4 counties in agricultural-
    rich eastern Washington.
        The combination of the short-line routes and the main-line
    routes provide a very essential link for our agricultural and
    manufactured goods to market. And it is one that supports not
    only the economic vitality of the State, but also of our
    Nation.
        In 1990, a national shortage of rail hopper cars made it
    difficult and costly for Washington State farmers to get grain
    to market. To help alleviate the shortage of grain cars, the
    State used Federal funds to purchase 29 used grain cars to
    carry wheat and barley from loading facilities in eastern
    Washington to export facilities in Washington and Oregon. From
    that time we have grown to own 113 railcars, which have been
    self-supporting, and the operating cost has developed and
    enabled that program to grow. This was a kind of a partnership
    with our ports in eastern Washington that has enabled us to
    continue to get heavy loads on rail to market, which then
    reduces the damage that is caused on our State highways.
        The State Freight Rail Assistance bank is an important
    program in our own State. It is a loan program that we have for
    public sectors intended for small projects, or is a small
    contribution towards larger projects. And we have programs
    administered by WashDOT that also allows for grants and loans
    through freight rail assistance. Sometimes that is the only
    ability for our rail shippers and our growers to find the
    ability to make improvements on short-line railroads and the
    main line to enable improvements that will help goods get to
    market better.
        Let me talk a bit about our Amtrak Cascades service, as
    well. Washington first partnered with Amtrak in 1994 in the
    connection and coordination of a passenger rail program. From
    that time, our vision and our goal from the Amtrak Northwest
    Cascades program, which spans from Eugene, Oregon, up to
    Vancouver, BC, was to grow incrementally a service of passenger
    rail programs which today serves six round-trips between
    Seattle and Portland, two round-trips between Seattle and
    Vancouver, BC, and carries over 890,000 passengers a year. It
    was the ability for us to have a program that enabled us to be
    ready for the Federal rail grant when it came, which we were
    able to successfully get $800 million for improvements to our
    Burlington Northern Santa Fe rail line, which will add
    increased trips, speeds, and reliability.
        As this body considers and discusses PRIIA, the
    reauthorization, I would want to make sure that we mention that
    the Section 305 coordinated equipment purchase program is a
    very good thing for our States. It enables us to get lower
    cost, economy of scale for equipment. It enables us to have
    partnerships across the United States, to deliver projects and
    programs and higher speed passenger rail service, as an
    opportunity for our States to continue to serve the public in a
    growing population that we have.
        Thank you for your time.
        Mr. Denham. Thank you, Ms. Hammond.
        Mr. Stem, you may proceed.
        Mr. Stem. Thank you, Mr. Chairman. We appreciate the
    opportunity to testify today about our views on rail
    transportation policy. We want to readily acknowledge that
    although I am here representing SMART transportation division
    today, these remarks are intended to represent the input and
    the equity that all of our railroad employees have earned in
    the industry.
        All of rail labor has a long history of supporting our
    industry and working in partnership with the industry on a
    variety of issues. We understand and readily acknowledge that
    the most secure job is one in a profitable company that
    provides service that America needs. We have participated in
    many successful partnerships with this committee and with our
    industry on equipment safety standards, hours of service
    improvements, railroad retirement, pension reforms, and many
    opportunities to grow our freight and passenger rail
    industries.
        We think one of the success stories that this committee
    rarely hears about that should be acknowledged today is the
    success of the Rail Safety Advisory Committee that was
    sponsored by the Federal Railroad Administration during the
    Clinton administration. It was the first time that rail
    management, rail labor, rail suppliers, and the Federal
    Railroad Administration were all gathered together in an
    informal setting to participate in problem-solving exercises,
    an exchange of thoughts and an opportunity for suggestions on
    improved safety. RSAC continued to function well through the
    Bush administration, and continues today. Our rail industry
    today has improved safety processes in place and our safety
    record has significantly improved because of the RSAC process.
        We are proactive in our support for the industry, take an
    active role in policy discussions supporting the expansion of
    freight and passenger rail across the country. We also work
    with all segments of our rail and transit industries and
    legislative activities designed to highlight the advantages of
    rail. Our rail employees today have earned equity in the rail
    industry, and are very aggressive in long-term growth and
    stability of our industry.
        Passenger and freight railroads today are vital parts of
    America's transportation system, which require a level of skill
    and professionalism in the operation and maintenance of our
    industry that translates into tens of thousands of good career
    jobs for railroad employees. It takes many years to train and
    qualify most of the safety-critical railroad employee class.
    Our industry now focuses on hiring military veterans. We
    readily acknowledge that decision not only is that a patriotic
    decision, but military veterans bring something else to the
    table. They understand the discipline necessary to operate in a
    safety-critical environment, and they readily accept their role
    in the overall safety of the operation.
        The decision to focus on military veterans has proven to be
    a win-win situation for all involved. Raises our hiring
    standards, the railroads get a stable and mature employee that
    readily accepts instructions and the safety-critical
    responsibilities. Once they are trained and qualified, these
    military veterans then have transferable skills that are very
    much in demand.
        Railroad jobs are not just a job. They are careers where a
    person can earn a living wage to provide for their family and
    send their kids to college. Our rail industry enjoys the lowest
    turnover rate of any blue-collar industry in the country. In
    spite of the 24/7 operations in all types of weather, working
    on the railroad is more than a job, it is a way of life that
    was chosen. We are expecting the influx of new military
    veterans to even further reduce our turnover rate, and also to
    contribute to improved safety performance.
        We look forward to working with this committee during the
    RSIA and PRIIA reauthorizations. We have a few technical
    corrections to suggest for your consideration, and are working
    with your staff to do that.
        Mr. Hamberger mentioned the importance of coal for
    generation. Twenty percent of our jobs in this industry are
    directly related to the movement of coal, the use of coal. We
    encourage the committee to continue to look at alternatives for
    the use of coal, and the fact that the United States has 28
    percent of the world coal reserves.
        I need not remind this committee about the importance of
    Amtrak. It is America's passenger railroad. Amtrak is a partner
    with our private freight railroads.
        Hazmat. Hazardous material shipments are also an integral
    part of what our industry does.
        I thank you for the opportunity to address the committee,
    and I look forward to answering any questions the committee may
    have. Thank you.
        Mr. Denham. Thank you, Mr. Stem.
        Mr. Boardman, you may proceed.
        Mr. Boardman. Thank you, Mr. Chairman, Ranking Member
    Brown. In 1966 I rode a Penn Central passenger train from Rome,
    New York, to Syracuse, New York, as I volunteered to serve the
    country in the Air Force. Four years later, Penn Central was
    bankrupt, along with many others. And over the next 10 years,
    Congress repeatedly reorganized the industry.
        First came passenger rail, with the Rail Passenger Service
    Act, and Amtrak was created. Then there was deregulation. The
    implication was that railroads were no longer railroads, they
    were freight railroads, commuter railroads, and Amtrak. I spent
    the first 25 years of my career operating and managing
    passenger transportation, beginning in college as a bus driver,
    then a city transit manager, a public transit authority CEO, a
    county transportation commissioner, and then my own business,
    where I was the first employee.
        We had 11 different systems in New York State and 300
    employees when I left. And one of the critical pieces of what
    we did was to reduce the cost for social service agencies
    throughout New York State. We hired travel trainers, and we
    used every source of public transportation, including Amtrak,
    to move the people to reduce the cost.
        Each year a new Congress, a changing administration,
    freight railroads, commuters, NARP, real estate developers,
    vendors, advocates, extreme critics, global management
    companies, States, cities, counties, public authorities, rail
    labor all exist at various intersections with Amtrak. The
    result of those intersections, things like guidance and policy,
    requirements, often outlive both their authors and the
    circumstances that produce them.
        This is the world Amtrak inhabits. Amtrak will soon
    celebrate its 42nd birthday. And when that happens, I will have
    been the second-longest CEO in Amtrak's history. And that is
    4\1/2\ years. That is largely due to the world that Amtrak
    inhabits, based on the constant change fostered by these
    intersections.
        Ridership is up, revenue is up, while Federal operating
    subsidy is down, and so is our debt level. But the need for
    capital investment underpins operating cost improvements all
    along this industry. As Mr. Hamberger talked about, the private
    freight railroad capital investment in the long-distance
    network this year is over $24 billion.
        I came here to Amtrak on November 26th in 2008. I came here
    because I was committed to improving intercity passenger
    service in the United States. And it is for the same reason
    that I left my job as commissioner of transportation for George
    Pataki in New York, and joined the George W. Bush
    administration as a Federal Railroad Administrator. I love my
    country, and I know that safe, reliable, connected public
    transportation is a critical element of the common good needed
    by our people in support of our economy and the global
    competition we are in.
        When I got here there was no plan for fleet replacement, no
    strategic plan for the business, no vision for what could be.
    Today all of those things exist. And if this Congress works
    with us, I believe we can move all of those things forward for
    our Nation.
        Our strategic plan defines operational business lines.
    First in the Northeast Corridor, which needs tremendous capital
    investment today. But it is generating enough revenue above the
    rail to help reduce operating subsidies. But without that
    Federal capital investment, we are beginning to eat our assets
    into early retirement, and may have to reduce our speeds
    instead of increasing our speeds.
        It is 10 miles from Newark to Penn Station, New York City,
    500 trains a day on 2 tracks with 2 tunnels. In Penn Station
    over 1,000 trains a day on 21 tracks, the busiest station in
    North America. When one Hudson tunnel is out of service, 50
    percent of our capacity is lost. When both are out, New York
    and New England essentially are severed from the continental
    United States.
        The rural portions of our Nation are being abandoned, both
    by intercity buses and by airlines today. Most rural folks are
    driving today, and buses have a new business model as hub-to-
    hub carriers, like Megabus. Airlines must depend on Federal
    subsidies, some direct and some indirect, just like the
    highways. But it is Amtrak's long-distance trains that provide
    the backbone of connectivity for the people in the United
    States. Serving 40 percent of the rural population, 15 percent
    of our ridership comes from handling that----
        Ms. Brown. Excuse me, Mr. Boardman. Mr. Chairman, I would
    ask for 2 additional minutes for Mr. Boardman.
        Mr. Boardman. I am going fast enough, I can----
        Ms. Brown. I know it, that is why I want you to slow down.
    We want to hear what you have to say.
        Mr. Boardman. OK.
        [Laughter.]
        Ms. Brown. Thank you.
        Mr. Boardman. We provide the only service available for
    half of our stations in half of the States that we serve. This
    is the system you see today that we operate above here, and it
    is hard to pick out the colors. The long-distance are the
    lighter blue, the red is the Northeast Corridor, and the darker
    blue are systems like Paula operates.
        This next slide identifies what we lose on each of the
    long-distance trains. And if Congress were to tell us today to
    get rid of any of the lines that cost $10 million or more per
    year, it would be the top six routes on this chart.
        This next slide would be the initial result of the Nation,
    and would be divided at the Mississippi River. The common good
    of our Nation, its scattered families, and our belief in the
    United States of America truly demands a connected surface
    transportation service. That is Amtrak. Thank you.
        Mr. Denham. Thank you, Mr. Boardman. We will now commence
    with 5-minute questions from each of the Members. I would ask
    each Member, as we are starting this committee off, to follow
    those timelines so that we do not have to handle the gavel
    strongly from this end.
        Let me start first with Ms. Hammond. From a national
    perspective, how has the States' relationship with Amtrak
    evolved over the past 5 years?
        Ms. Hammond. We have, as I said, in Washington State had a
    relationship with Amtrak since 1994. As the incremental service
    and additional operating opportunities have come about, we have
    increased our partnership with Amtrak.
        It wasn't until the investment and the $800 million we
    received for high-speed rail was the opportunity for us and
    Amtrak and Burlington Northern Santa Fe to talk more about the
    measuring performance-managed opportunity that we have, and the
    commitment our State had taken on in accepting the capital
    money.
        With Amtrak, we now--and with Burlington Northern--have
    performance measures that we expect and are working through on
    service, speed, and reliability for the service. It has been
    difficult a bit at times, as Joe knows, as we have been working
    through a new accounting system that Amtrak has developed. But
    with the States now taking on, in 2013, 100 percent of the
    operating cost of our passenger service, contracting with
    Amtrak, we have made sure that we are getting it right on how
    our agreements between our service from Amtrak and how the
    States' contribution to Amtrak for that service is right and
    fair and equitable for the taxpayers of our own State.
        We in Washington State have been in performance management
    for many years, since 2001. And for us to see MAP-21 take on
    the requirements for a closer, more heavily managed performance
    for investments, as well as performance management for
    decisionmaking, we think it is the right step to go.
        We appreciate the partnership we have with Amtrak, we are
    struggling through the details on how much of the cost of
    operating that we will be taking on. But I would say it is a
    strong partnership, particularly strong with the relationships
    we have with the Northwest Amtrak staff and leadership, and we
    appreciate the opportunity to continue to work with them.
        Mr. Denham. Thank you. And certainly we recognize that it
    is a big adjustment. As chair of AASHTO's High-Speed Rail and
    Intercity Passenger Rail Leadership Group, are you getting the
    details that you need to implement Section 209 of the Passenger
    Rail Reinvestment----
        Ms. Hammond. We have been working closely--and one of the
    things that we did that was smart and right was, as a group of
    States, we banded together to work with Amtrak as a body. So,
    as we set forth the criteria and the requirements that we would
    need for information for negotiating and understanding our
    operating costs that we are assuming, we are doing that as a
    Nation and as a group of States, which I think is the right way
    to go.
        We have had our moments. I wouldn't say that we haven't
    always seen eye to eye. But one of the important
    characteristics to work through together is that we pay for the
    costs to operate the system that we are enjoying and those
    benefits, and then continue to work with Amtrak as they work on
    the long-range and long-distance service that also comes
    through our State.
        Mr. Denham. Thank you. Mr. Boardman, the Northeast Corridor
    route is the most profitable--the only financially profitable
    line in your business. How can you improve upon its success and
    how do you use its profits?
        Mr. Boardman. Right now we can call it profits if we talk
    about above the rail. If you look at the infrastructure
    necessary, capital investment in the infrastructure, there
    would be no profits. And I know you know that, Mr. Chairman,
    just to--but to be clear on the element of it.
        We are clearing between $200 to $300 million above the
    rail, in terms of revenue. And that revenue has gone right back
    into the subsidy for reducing our debt, and also reducing the
    amount of operating assistance money that the Federal
    Government--that you--have chosen to give us.
        We also receive a different set of dollars for investment
    in the infrastructure in the Northeast Corridor. What would
    help us improve the revenues is more capital infrastructure
    investment for the future, to allow us to have an increased
    capacity and to increase speed.
        Mr. Denham. Thank you. And how do you view the relationship
    between Amtrak and its State partners, especially with the
    implementation of 209?
        Mr. Boardman. I think that we have a very good working
    relationship with our State partners. It is especially so in
    the Northwest--and I think Ms. Hammond pointed it out. Kurt
    Laird, for example, who is our general superintendent in the
    Northwest, has a solid relationship with those States that he
    is responsible for. And that exists across the country in
    different locations.
        We have had difficulty, as she has identified, really
    identifying the charges for overhead, the necessities for us to
    cover our costs, and for them to make sure that they are paying
    the right costs. That has been a battle at Amtrak for probably
    40 of the 42 years that it has existed, just because of the way
    that railroads really account for their costs, and where we are
    going. But we have had a very transparent process, and I think
    we get closer and closer to the end of where we need to be to
    make this happen.
        Mr. Denham. Thank you. Ms. Brown.
        Ms. Brown. Thank you. My first question is for Mr.
    Hamberger. In 2013, American freight railroads planned to
    invest $24.5 billion in rail networks. And that is to be
    commended. That is a wonderful thing. But we in the Federal
    Government have done well with the TIGER grants. Many Members
    don't feel that it is a good investment of taxpayers' money,
    and we have three major projects, and one of them Ms. Hammond
    is talking about, but--one that I visited with. Can you tell us
    the importance of those kinds of investments?
        Mr. Hamberger. Thank you, Congresswoman Brown. To put it in
    context, the TIGER grants do not go to the railroads. The TIGER
    grants go to the States. And at least in the American Recovery
    and Reinvestment Act--ARRA--they were general fund revenues,
    not Highway Trust Fund revenues. So the argument is if there
    are general fund revenues going to the State, shouldn't the
    State have the right to make the determination where best to
    spend that money to get the best return on that investment in
    the area of transportation?
        One of the things that has happened in the past decade is
    the involvement of public-private partnerships. The poster
    child of a successful public-private partnership is the CREATE
    program in Chicago. It began about 10 years ago, when we, as a
    freight rail industry, stepped forward and said that we would
    put over $300 million of our own money on the barrel head.
    Since then both the State and the Federal Government have come
    forward with money, and some of that funding was through a
    TIGER grant.
        And so, what this money is is a way to enable the State to
    provide the public money into the public-private partnership
    project. It is important and particularly true in CREATE that
    the idea is for the private sector to pay for the private
    sector benefits and the public sector to pay for the public
    sector benefits, such as cleaner air, less congestion, more
    fluid movement through the city by building grade crossing
    separations, for example, which that money is used for,
    oftentimes.
        So, if indeed public-private partnerships are a way to
    increase investment in infrastructure--and I believe they
    should be--then TIGER grants are one way to provide that public
    money for public-private partnerships.
        Ms. Brown. Thank you. Mr. Boardman, there has been a lot of
    discussion about Hurricane Sandy and Amtrak involvement. And
    what did you do to recover, and whether or not the Federal
    Government provided the kind of assistance that Amtrak needed.
        Mr. Boardman. Well, we found out right away, Ms. Brown,
    that we were a private railroad. That is what the Corps of
    Engineers told us. And, as a result of that, we began recovery
    on our own, and we recovered as quickly as we could. Now,
    toward the end of the process we did receive some help for
    Substation 41--which is a pretty large concern--from the Corps
    of Engineers.
        But to get the tunnels pumped out, that was Amtrak's doing.
    And then, actually, in cooperation with some of the freight
    railroads and their assistance, and other commuter railroads,
    we moved forward quickly, restoring service by the next night
    into New York City. And within 3 days, back to Boston.
        Ms. Brown. So you were able to resume operation within 2
    weeks, or----
        Mr. Boardman. Oh, yes. And we were, actually, in operation
    within the next day or so. A limited operation, because of some
    of the difficulties we were facing.
        Ms. Brown. Everyone up here is talking about the sequester.
    And people at home are talking about jobs. Can you tell us how
    that is affecting your operation?
        Mr. Boardman. We began to look several months ago at how
    this might happen. Sequestration was not a new idea. It was
    going to potentially happen, and Amtrak always thinks that
    whatever the worst is, it probably will happen, so we need to
    do something about that. And we began immediately to look at
    how we would get through and what the numbers might really be
    for us.
        So, we looked at our capital program first. We now are
    reducing the inventory that we had available of ties, for
    example, and what we will do for the work this year. And as
    long as this doesn't go on for a long period of time, we are
    going to get through without any service cuts. It is anathema
    for Amtrak to start service cuts, because it becomes a double-
    edged sword. We lose the revenues that we are receiving, and we
    lose the opportunity for continuing service.
        Ms. Brown. Thank you. I yield back the balance of my time.
        Mr. Denham. Before I recognize Mr. Duncan, while we are on
    sequestration, can you just tell us what, in your opinion, a
    ``long period of time'' would be?
        Mr. Boardman. Well, what--we thought about it this way, Mr.
    Chairman, is if the--if the continuing resolution goes forward
    from fiscal 2012, then we think that our hole is somewhere in
    the neighborhood--and I know some new numbers have come out now
    that I haven't evaluated, and Mike might even help me on this--
    but we were at around the $37 million amount that we would have
    to cover. Part of that was sequestration, and part of it was
    the losses we had because of Sandy that weren't reimbursed, and
    that may be reimbursed but may be sequestered, as well. That
    would allow us to get through, basically, this year with a very
    low level of cash and with a very low inventory.
        If we go to a 2013-style budget, where there was a
    reduction from what we received in operating assistance, which
    I believe in 2012 was $466 million, and we were working toward
    a $375 million level, and we don't have enough time to make
    adjustments, then we are probably going to be in trouble in the
    June/July timeframe. But some of those things may have to be
    answered in a more complete, written response--especially if I
    am seeing I might be off a little bit on numbers.
        Mr. Denham. Sure. And just to be clear, to give the
    committee a baseline, you know, obviously, every committee is
    talking about sequestration right now. But under the Senate
    budget, you would receive $400 million plus the $30.4 million,
    which was authorized by FEMA. Under sequestration, you would
    receive $442 million. So you would actually receive an increase
    under sequestration, above what the current budget levels would
    be.
        Mr. Boardman. If it stays in the 2012 amount, yes.
        Mr. Denham. So your bigger concern is not sequestration--I
    don't want to put words in your mouth, but your concern would
    be the CR, or the new appropriations bill coming out of the
    Senate.
        Mr. Boardman. Yes. And if that gets sequestered as well--
    and I don't know the facts of how that really works--then we
    saw that as the worst case.
        Mr. Denham. Thank you. Mr. Duncan.
        Mr. Duncan. Well, thank you, Mr. Chairman, and
    congratulations on assuming the chairmanship of this very
    important subcommittee. And I want to thank all of the
    witnesses for their testimony.
        And I will tell Mr. Boardman this past weekend was my
    wife's and my 35th anniversary. And I rode the train up to New
    York City and met her on Friday, and rode back on Monday. I
    rode the regional train on Friday and the Acela train back on
    Monday. I had a very comfortable, pleasant, on-time experience.
    So I just wanted to tell you that.
        [Laughter.]
        Mr. Boardman. Thank you, Mr. Duncan.
        Mr. Duncan. Anyway, and I wanted to welcome my long-time
    friend, Mr. Hamberger. I have always said that I just don't
    think the freight rail companies toot their horn nearly enough,
    because they are important to everybody, even people that never
    think--who never think about the rail system in this country.
    You have told some interesting statistics. I never heard that
    about it being safer than working in a grocery store. I have
    worked in a grocery store all through high school, as a bag boy
    at the A&P. But anyway, and to think that you are moving twice
    as much now for half the cost as in 1980.
        Many people here today don't remember Congressman Staggers,
    but he was a leading Democratic chairman who led the
    deregulation--or at least partial deregulation--of the rail
    industry.
        And--but I have always heard that railroads are leading
    indicators, and I am curious as to what the next few months
    look like for your industry, Mr. Hamberger. And in light of
    what Mr. Stem said about how 20 percent of your business is due
    to coal, if we decrease the use of coal in this country, what
    happens to your industry? And if you have had any thoughts or
    predictions about that.
        Mr. Hamberger. Yes, sir. Let me answer those two separate
    questions.
        Mr. Duncan. Right.
        Mr. Hamberger. We are, indeed, a leading-edge indicator.
    Our weekly car loadings statistics are sought by policymakers
    throughout the Government. What we are seeing right now is slow
    but steady growth in the 2-percent range. We are hopeful that
    that will continue.
        Automobiles are growing very fast. We are looking at maybe
    15.5 million automobiles this year, maybe a little bit more
    than that. At the depth of the recession it was under 10
    million. But we are not yet back to where we were in 2006 and
    2007. Intermodal is growing at about 5 percent per year. We are
    seeing some growth in the movement of lumber for housing
    markets. So we are seeing--I hate to use the word ``green
    shoots,'' but things are starting to come back. We are hopeful
    that that will continue. Obviously, there is some connection
    between what happens here and the economy, and what consumer
    confidence will be. So we are keeping an eye on all of that,
    meanwhile investing with the idea that the economy will come
    back, so that when it does we are able to move the materials
    when they need to be moved.
        Coal has been an ongoing struggle. There are any number of
    regulations that are making it more difficult for coal-fired
    utilities to continue to burn coal or to open new coal-fired
    power plants. You combine that with the operation of the
    marketplace, where natural gas, because of fracking, is now in
    the $3.50 to $4 MCF range. It is, therefore, cheaper, more cost
    effective, for some utilities to burn natural gas. What we
    don't know is will that natural gas price stay down at $3.50 or
    $4. Right now I understand--I am told that the world market
    price of natural gas is over $10 MCF. If that eventually
    stabilizes above $5, $6, or $7, then we would see utilities
    wanting to move back to using coal.
        And that brings me back to the first issue. Would the
    regulatory environment allow that to happen? We are down
    somewhere in the 12- to 15-percent range in 2012 in carloadings
    of coal as an industry. And so that did have an impact,
    obviously. But we also had some sectors growing, like
    intermodal traffic. One that is growing fast but is still small
    in terms of the number of carloads, is moving crude oil by
    rail. There have been some recent articles about that I am sure
    you have read.
        Mr. Duncan. Well, my time is up, but I will just say this,
    that I have some concern that the improvements we have seen in
    the economy over the past several months are based primarily on
    pent-up demand. And so I hope we make some good decisions here
    so we can help this country to boom in the years ahead. But it
    is going to depend on what we do here, in large--in significant
    part. Thank you, Mr. Chairman.
        Mr. Denham. Thank you, Mr. Duncan. Mr. Nadler.
        Mr. Nadler. Thank you, Mr. Chairman. Let me begin by
    thanking all concerned for holding this hearing, and say that I
    am a direct--not conflict of interest, since I ride the Acela
    every single week back and forth on the Northeast Corridor.
    Having said that, I want to ask Mr. Hamberger about freight
    railroads.
        You have testified that since the Staggers Act the
    railroads have invested over $500 billion in plant and
    equipment and direct capital investment, and you are planning--
    you did about $24.5 billion this year, planning about $24.5
    billion in direct capital investment next year. You have also
    testified that we are looking at--I think your testimony was a
    38--I don't remember, 38-percent increase in freight volume
    over the next--or 80 percent or 78 percent, I think it was,
    over the next 20 years.
        Mr. Hamberger. Yes.
        Mr. Nadler. Is there sufficient investment capacity to keep
    up with that? Or do we--in other words, are the railroads
    generating sufficient income to invest sufficiently to keep up
    with the growing demand? And especially to keep up with growing
    demand if we shift more from highways to railroad, as our
    energy efficiency would demand that we do?
        Mr. Hamberger. As always, a very penetrating question, Mr.
    Nadler. The answer is I hope so. A number of years ago we had a
    study done that showed that we would not be able to keep up
    with the demand. That was before the recession. And it
    predicted that there would be a delta of somewhere in the $48
    billion range of what we needed to invest just to maintain our
    current market share.
        We have gone back and taken a look at that study, post-
    recession. The demand level has been pushed out a number of
    years, so we won't reach the same level that we thought we
    would in 2035, number one.
        Number two, we are investing more than we were at that
    time, so we are putting more money back into it, because we are
    able to.
        And, number three, we have taken a look at the productivity
    factor, and have adjusted that based on facts, so that the
    productivity, annualized, is about three-quarters of a percent,
    rather than a half-a-percent. That little change, along with
    the investment and pushing out of the demand, makes me feel
    that we will be able to, in fact, meet the demand. And, again,
    that will depend upon whether the current balanced regulatory
    system continues, so that we can continue to earn money to
    reinvest. So that would certainly be the caveat there.
        And just so there is no misunderstanding on economic terms,
    when we say $525 billion, that covers both CAPEX and
    maintenance money.
        Mr. Nadler. That figure that I couldn't remember a moment
    ago is an 88-percent increase in demand by 2035.
        Mr. Hamberger. By 2035, yes.
        Mr. Nadler. But I was intrigued by what you just said. You
    said that you are looking at--you have made a minor adjustment
    to the anticipated productivity increase from half-a-percent to
    three-quarters of a percent, the small change. That is a 50-
    percent change. That is not a small change, it is a huge
    assumption. What justifies that 50 percent?
        Mr. Hamberger. I have already said more than I know, Mr.
    Nadler. Let me respond for the record, if I might.
        [The Association of American Railroads inserted the
    following information for the record:]

            The Federal Highway Administration in January 2013
            predicted that total freight shipments will rise from
            an estimated 17.6 million tons in 2011 to 28.5 billion
            tons in 2040--a 62-percent increase.

        Mr. Nadler. OK, but where I am really leading, obviously,
    is the same question I have been asking for the last 15 years
    or so, which is what can the Federal Government do to help
    expand investment in rail? Because, frankly, the railroads have
    made a Herculean effort and a very positive Herculean effort to
    invest. I think the country could use more investment.
        Mr. Hamberger. As you know, at one point in the past we
    were advocating an investment tax credit focused on capital
    expenditures solely for the expansion of capacity. That did not
    garner majority support in the House and Senate. Given the
    discussion about the need to broaden the base and lower the
    corporate tax rate and not talk about adding more targeted tax
    provisions, we have lowered our voice on that.
        However, for the short lines, the investment tax credit
    still is very important--the 45G provision, which has helped
    the short lines invest. And, as you know, I believe the number
    is 26 percent of all rail traffic either begins or ends on a
    short line.
        Mr. Nadler. Thank you. Before my time runs out let me ask
    Mr. Boardman one quick question, and that is you testified
    about the very large percentage of the Northeast Corridor going
    through the tunnels into Penn Station. Now, if that shut down
    it would sever New England and New York from the rest of the
    country, basically, which it clearly would. You have only got
    two tracks. Governor Christie last year, I think it was, vetoed
    the new--what was proposed to be a new tunnel into Penn Station
    that would more than double capacity. What do you think we
    should be doing in the future to deal with that problem?
    Because, clearly, we have to deal with that problem.
        Mr. Boardman. Well, the--those tunnels were never planned
    to go into Penn Station. They went under Macy's and----
        Mr. Nadler. You mean the proposed ones.
        Mr. Boardman. Yes, the proposed tunnels. The tunnels that
    are part of the Gateway Project right now really would go
    directly into Penn Station, and will make a big difference in
    how we make connectivity, both for high-speed rail and for New
    Jersey Transit and Long Island Rail Road, and all those that
    need--and I know that Metro North wants to get into Penn
    Station at this point in time, too. The capacity just is not
    there without a couple of new tunnels and the lines all the way
    from Newark in to Penn Station itself.
        Mr. Nadler. Thank you.
        Mr. Denham. Mr. Barletta.
        Mr. Barletta. Thank you, Mr. Chairman. Mr. Hamberger, as
    you know, it won't be long before the widening of the Panama
    Canal is completed. What do you see as the economic
    opportunities and challenges upon the completion of that?
        And, two, I envision development of inland ports,
    obviously, to move this freight away from the ports and inland.
    Are we ready for that? And if you could, just shed some light.
        Mr. Hamberger. I am going to beg off on the first question,
    Mr. Barletta. In fact, the Senate Commerce Committee is
    contemplating a hearing in April on that exact issue, the
    Panama Canal. We are busy internally talking to our members to
    try to get their projections on what that might mean for their
    traffic. I suspect, from where you are headquartered, it might
    affect what your projections are. So, I would have a better
    ability to answer that, if I could, for the record in the next
    week or so.
        With respect to the ports, when you ask what can be done to
    help move more freight by rail, the good news is Burlington
    Northern Santa Fe just got their final environmental impact
    statement issued for their new intermodal facility at the Port
    of L.A.-Long Beach. The bad news is they started 8 years ago.
    Those kinds of permitting and regulatory issues have taken a
    lot of time. And this will be, as I understand it, a state-of-
    the-art, clean, intermodal facility which is going to take
    thousands of trucks a day off the local interstates. I am sure
    Rep. Napolitano knows more than I do about this project. But it
    is that kind of cooperation that demonstrates we are just part
    of an international logistics chain. And so the investments at
    the ports, both dredging and portside, landside facilities are
    critical.
        I don't know whether or not the ports are ready. I suspect
    that my counterpart at the American Association of Port
    Authorities could answer that a little bit more precisely.
        Mr. Barletta. Mr. Stem, the United States Department of
    Transportation is currently conducting a 2-year study, the
    impact of longer and heavier trucks on the Nation's highways.
    Would you agree that Congress should await the results of this
    study before proceeding to consider any further legislation in
    this area?
        Mr. Stem. Yes, sir. We not only agree with that philosophy,
    but we think that that runs counter to the stated goals of the
    U.S. Department of Transportation itself. This committee, over
    the last 20 years, with my experience, has debated ways to use
    rail for highway congestion issues. It also runs--flies in the
    face of that. We think that the study would give this committee
    and this Congress the types of information that you can use in
    your decisionmaking process.
        Mr. Barletta. Yes. As a former mayor, I could tell you I am
    sure there is municipal interest in this, as well. As these
    heavier trucks get off the interstate they go on to local roads
    that are not built to the same specs as the interstate system.
    And that cost falls right on the local taxpayers. So I have my
    mayor's hat on, looking out for mayors across the country, as
    well. So I am interested in seeing what that study will show.
        Mr. Stem. If there were no viable transportation
    alternative for those heavy loads, then that would be one
    portion of the debate about public investment and rebuilding
    offramps and bridges. But there are viable options. Put the
    truck itself on a rail flat car and move it to point of
    destination.
        And the current sizes are programmed in to this
    international logistics chain that Mr. Hamberger referred to,
    which is another part of that conversation.
        Mr. Barletta. Yes. I agree with you, that we should wait
    until this study is completed so we have the information we
    need to make a good decision about the safety and end cost.
    Thank you.
        Thank you, Mr. Chair.
        Mr. Denham. Thank you, Mr. Barletta. Mr. Michaud.
        Mr. Michaud. Thank you very much, Mr. Chairman. And on the
    same vein of questioning, I--my question is for Mr. Hamberger.
        Regarding the rail diversion, in 2010 the American
    Association of Railroads hired MIT researcher Carl Martin to
    study the effect a higher truck weight limit would have on rail
    transportation. Are you familiar with that report?
        Mr. Hamberger. I believe that was more the American Short
    Line and Regional Railroad Association, but yes, sir.
        Mr. Michaud. Yes. In that report Martin predicted that a
    truck weight increase similar to the one that is before this
    committee would result in diversion of freight from rail to
    truck only if--and only if--rail did not respond by lowering
    their rates, increasing productivity, or improving service.
        Mr. Martin's report goes on to state that should rail
    respond to more productive trucks by reducing the rate,
    diversion would not only be minimal, but the trucking industry
    would actually see a greater reduction than rail, a 7-percent
    overall reduction in truck miles, and only a 5-percent
    reduction in rail traffic delivering the same volume of freight
    with fewer miles for both rail and trucks. That sounds like to
    be more efficient use of both rail and trucks in the system.
        AAR has used this study to charge that rail traffic would
    suffer. By reading this on page 18, is it true that the study
    also undercuts your argument that rail would suffer if you had
    a higher weight limit?
        Mr. Hamberger. Not in the least, sir, no. What you are not
    talking about is the subsidy. If you increase the subsidy to
    the truckers, then railroads are going to have to cut rates to
    compete with that increased subsidy. The point is it is not in
    the national best interest to increase the subsidy to heavy
    trucks. Make them pay for the damage they do. That is what this
    study is going to find out. Congress has already spoken and has
    mandated that that is what DOT should take a look at.
        Our whole argument is when we go from 263,000 pounds to
    286,000-pound railcars, that allows an increase in
    productivity. And this is a technical term--but those heavier
    cars ``beat the hell'' out of the track.
        Mr. Michaud. OK.
        Mr. Hamberger. But you know who pays for that increased
    maintenance? You know who has to pay for the increased----
        Mr. Michaud. OK, OK----
        Mr. Hamberger. We do. The railroads.
        Mr. Michaud. And my second question is when you look at--
    there has also been DOT studies from going to a higher weight,
    that actually, with a six-axle, a higher weight, the impact on
    the highway--not bridges, but highway--is minimal. The safety
    issues are taken care of. The problem I see in that report and
    your argument is the--it is very clear that unless you reduce
    rate, increase productivity, trucks lose more by an increased
    truck weight, as far as capacity.
        The other concern I see when you talk about no subsidies,
    when you look at short-line rail, the problem being is because
    of the ineffective way that some short-line rails are running
    their operation they are losing more, and it is causing States
    to actually have to either abandon the rail line or purchase
    it. And, actually, that happened to Maine. Get back to the
    ranking member's question about the State taking over a short-
    line rail, used TIGER grant funds, because the rail has not
    been able to reduce rates or increase.
        So, I guess my concern being is on page 18 of that report,
    you know, it is very clear that rail would--if you do not
    respond to rates, increased productivity, or improving
    services, then yes, it would affect what you would be getting
    for an increased volume. But this here says if you respond in
    this area it would not affect. Trucks will be hurt more. And
    why does that not undercut your argument----
        Mr. Hamberger. Well, because you are not looking at both
    sides of the equation, Congressman. The other side of the
    equation is the subsidy. The short line in Maine, you say they
    weren't running it properly. Maybe they couldn't compete with
    the subsidy of the truckers. And that happened in----
        Mr. Michaud. No, no. This was before the weight increase in
    the subsidy--see my time is running out. But it was before the
    increase in weights. And when you look at previous DOT studies,
    an increase in weight actually will reduce the CO2 emissions,
    would reduce the cost of fuel, would take off more trucks off
    the road if you had that higher increase in rate--weight,
    rather.
        So I see my time has expired, but we will be hearing a lot
    more about this particular issue, I am sure. Thank you.
        Ms. Brown. Mr. Chairman, can Mr. Hamberger have, if not the
    time to respond now, time to respond in writing? Because I
    think this is an important question for this committee. Maybe
    you can grant him an additional minute to respond.
        Mr. Hamberger. I would just say that Mr. Michaud has made
    these arguments, and Congress last year voted 33 to 22 to send
    it to DOT to take a look at the various sides of this whole
    issue. And, therefore, I think that Mr. Barletta has it
    correct, and Mr. Stem has it correct. When that DOT study comes
    back, perhaps it will be able to answer these questions once
    and for all.
        On the six-axle truck, you did say that it doesn't address
    the safety of bridges, and that is, of course, a very important
    part of the study that I hope DOT will be looking at. As the
    President said in his State of the Union Address, there are
    over 60,000 structurally deficient bridges around the country.
    So the impact of heavier trucks on bridges that were not
    designed to carry that load needs to be looked at, as well.
    And, of course, the sixth axle doesn't do much to mitigate that
    weight on the bridge. It is the gross weight of the truck that
    affects the bridge--unless it is a really short bridge.
        Mr. Denham. Thank you, Mr. Hamberger. And I would just
    remind Members as well as witnesses that we will be submitting
    questions at the end of this hearing, and ask witnesses to
    respond to those questions forthwith.
        At this time I would like to recognize Mr. Perry for 5
    minutes.
        Mr. Perry. Thank you, Mr. Chairman. And I appreciate all
    our guests' testimony, and your passion and dedication to what
    is arguably one of the foundations of the American landscape
    and our economy.
        With that, I am just wondering--and I think I would like to
    direct--seems like Mr. Hamberger has taken an unusual amount of
    the questioning, but he seems to have the overall purview. So
    maybe if not, somebody else can chime in, but if you could
    characterize maybe, like, what you would consider the three
    largest cost drivers for the industry as you see it, whether it
    is freight, whether it is passenger, whether it is both, the
    three largest cost drivers for the rail industry, in
    particular, whether it is regulation, whether it is labor,
    whether it is fuel, whether it is O&M. Tell me what you think.
        Mr. Hamberger. Well, the top two clearly are fuel. The
    larger railroads burn a billion-and-a-half gallons of fuel
    every year.
        Number two, we have a very well-trained professional
    workforce. Labor costs are, I would guess, number two.
        And number three would be technology and safety
    investments.
        Mr. Perry. With that--and I understand the significant
    investment that your industry has made to upgrades and
    modernization and safety, et cetera, over the years, as
    appropriate--and of course, the taxpayers--and I think they
    will be willing, as a matter of fact, happy, to support the
    upgrades and the foundational changes that you folks are
    advocating for, but I am sure they are going to want to know
    that it is being spent responsibly, and that we are getting the
    most efficiency for that.
        So I am wondering what kind of programs the industry is
    instituting to reform the cost drivers, the major cost drivers
    like fuel, like labor, like technology, if any?
        For instance, I am from Pennsylvania. The district I
    represent drills for Marcellus shale gas. We might have some
    Utica underneath or something like that. But are--seems to me
    that the locomotives are more simple conversion to natural gas
    than your passenger vehicle, because you can pull the tanks
    right behind you, but I don't know. So I am looking for some
    answers to those questions about gaining those efficiencies, to
    make sure that we are getting the most bang for the buck for
    our tax dollars.
        Mr. Hamberger. There is a test going on that Canadian
    National is running up in Canada. Liquified natural gas has
    been something that the industry has looked at on and off over
    the years. One of the concerns is, as you project, the cost of
    LNG. Will it stay where it is today or will it go down? Where
    will it end up?
        One of the challenges is, of course, that it requires a
    whole new network of distribution for liquified natural gas,
    and who bears the cost of making that conversion? But it is
    something that the industry is looking at.
        And I don't know, Joe, maybe you have something--but we
    have gone from 4,000 horsepower to 6,000 horsepower,
    distributed power. We have done a number of things to improve
    productivity. We have doubled our fuel mileage in the last 20
    years, so it is something that we are focused on.
        Mr. Boardman. Happy to help you out.
        Mr. Hamberger. Thanks, Joe.
        Mr. Boardman. You know, you have really been on the hook
    here for quite a while.
        It really drives the equation here that Ed is talking
    about. If you really put natural gas, you have got a lot less--
    at least in my experience--a lot less BTUs, so you do have a
    considerable difference in what you are going to have to have
    for a locomotive.
        Of course in the passenger side of things--and those that
    are in the Northeast sometimes understand and sometimes they
    don't--is that everything between Boston and Washington that is
    passenger-related operates on electricity. Or most everything.
    There are a few others, some of the commuter lines that come
    in, that are diesel-operated, and there is some freight along
    the corridor that is diesel-operated.
        But even electric power begins to bring up questions. Is it
    electric that is generated by coal fire? Is it electric that is
    generated by natural gas? Or, in some cases, we are able to
    generate it in the Northeast by water power so that there is a
    hydro component to it, as well. But hydro and compressed
    natural gas today--which is growing, of course--is a small part
    of what we really need to do.
        One of the things that prevented us from getting back into
    operation as quickly as we needed to into New York City was
    that there was not sufficient power at the right cycles per
    second that really delivered the number of volts that we needed
    to operate more trains into New York City. And that is becoming
    a limiting factor for us on the Northeast Corridor, as well.
        So, we are using almost all the technology today with
    freight and with passenger, looking for these solutions that we
    can find. Such as the green diesels, where we are using
    electric locomotives in some of the yards, and some of the
    improvements that we are finding are the right things for us to
    do. But something beyond where the diesel really provides
    today, I think, is a major change in the infrastructure.
        Mr. Perry. OK. Thank you, Mr. Chairman. I see my time has
    expired. If I could get maybe written comments on the labor
    component from Mr. Stem, that would be great. And I appreciate
    your input. Thank you.
        Mr. Stem. I would welcome that opportunity, and I would
    just comment, as a perspective for you, that in 2013 we have
    half as many employees today moving more than twice the number
    of railcars around the country that were in existence in 1980.
    So we have been engaged in a long-term productivity improvement
    since 1980, and that continues. And Mr. Hamberger is correct,
    we do have a very professional workforce working on the
    railroads today.
        Mr. Denham. Thank you. Mr. Walz.
        Mr. Walz. Thank you, Mr. Chairman. And I would like to
    thank all of you with your participation in Mr. Denham's I Hire
    Veterans initiative. We know your commitment to that is strong,
    always been there. This isn't something new for any of you, and
    we understand that. And I am grateful for that. I also am
    appreciative of the work you do, the careers you create, and
    the way you move America.
        And I say this not in classic Minnesota passive-
    aggressiveness, but in honesty amongst friends, that we need
    you out there, but I also have concerns in farm country and
    rural America. And I would be remiss not to bring them up. And,
    as you know, I have a long history with this, from the 2008
    Farm Bill, asking. I want the facts on this. And in classic
    Washington fashion it is either/or. We need rail and we need
    highways. We need multimodal and we need ports.
        What my concern is--and I understand clearly that you want
    as much traffic as you can get and as many customers as you can
    get, but I want to make sure the competition is there.
        And so, Mr. Hamberger, what do you say--and I know you hear
    this--you have been great in working with me on this issue of
    trying to figure this out. What about captive shipping? What
    about bottlenecks? What about paper barriers?
        And then, add into that, I would have to say I am a
    supporter of Mr. Michaud's position on truck weights. I too
    want to see what the studies are. But we have had them, we are
    out there. I really don't believe, no matter what that study
    says, that all of a sudden you are going to say, ``Well, the
    study is with us, go for that, raise those rates.'' I just
    don't see that.
        And I want to know if you can help me understand. How do we
    reach a compromise on this? You need the truckers, they need
    you. My consumers need both of you in a--in the best possible
    way. And we need the market to work. How do we do that?
        And anyone, if you want to. I don't want to put you on the
    spot, because I truly am--and not passive-aggressively--I am
    appreciative of what you have done, and the work you have done.
        Mr. Hamberger. And I appreciate that, and we have indeed
    had these conversations over the years. And thank you for the
    opportunity, again.
        You know, the classic issue is that our average rail rates
    have gone down 44 percent, and that has allowed us and allowed
    our customers to compete. Obviously, an individual captive
    shipper who may not have as many options may say, ``Well, that
    is nice, but my rates haven't gone down.'' That is why we
    continue to be regulated by the Surface Transportation Board,
    which we believe has a balanced regulatory approach. If there
    is not effective competition, then the Board can step in and
    cap those rates. And, as you know, they have instituted several
    layers of ratemaking, not just one that takes a year or two,
    but they have----
        Mr. Walz. Do you know if anybody has ever won an appeal,
    any of our shippers out there?
        Mr. Hamberger. Oh, absolutely.
        Mr. Walz. Have they ever won?
        Mr. Hamberger. Sure, yes. In fact, the scorecard that the
    STB publishes for the stand-alone cost is about 50/50. I
    believe several of our chemical customers have just settled a
    number of cases. My own view is that if there is a settlement,
    then somehow there has been some accommodation. And so I would
    consider that to be a process that, in fact, has worked, in my
    opinion.
        Your point about the cooperation between trucking and rail
    is actually going on out there, as you point out. J.B. Hunt
    Trucking, which is publicly traded--I may not have this number
    exactly right, but for the third quarter of 2012, over 60
    percent of their revenues came from intermodal. J.B. Hunt
    Trucking. No, it is not called J.B. Hunt Trucking anymore, it
    is J.B. Hunt Transportation. And so those are the kinds of
    partnerships that we are trying to build.
        With respect to the issue that I just discussed with Mr.
    Michaud on truck size and weight, again it is a matter of who
    is bearing the price of that increased productivity. If it is
    an increased subsidy from the general traveler, the general
    Highway Trust Fund, we think that that is unfair to us, since,
    as I tried to point out, we are entirely responsible for paying
    for the increased productivity on our own right of way.
        Mr. Walz. I want a----
        Mr. Hamberger. And I agree with you----
        Mr. Walz. I want a solution that works for you and works
    for our shippers. These are big folks, too. I mean these are
    major motor companies----
        Mr. Hamberger. Yes.
        Mr. Walz [continuing]. Chemical companies, rural electrics,
    and all of that. Do you have any objection to the Secretary of
    Ag sitting on that decision with STB as it impacts agriculture?
    I had an amendment in this year's languishing farm bill to add
    that, of just trying to make sure they have a say.
        Mr. Hamberger. Well, I think the question where we had some
    concern was, as I understand your language, right now the
    Secretary of Agriculture can participate in any proceeding that
    he wants. And I believe, in fact, he just filed comments on
    Friday. So a statutory requirement that he or she participate
    just seems to be a little too much. But we certainly have no
    objection to the Secretaries of Agriculture or Commerce or
    Defense or anybody weighing in as they see fit.
        Mr. Walz. Again, I appreciate all you do out there. It is
    important to rural America.
        Mr. Hamberger. Thank you.
        Mr. Massie [presiding]. Having assumed the chair, I will
    now yield myself 5 minutes. It is amazing what a freshman has
    got to do to ask a question around here.
        [Laughter.]
        Mr. Massie. My name is Thomas Massie. But Mr. Boardman, my
    question is for you. The Northeast Corridor, according to the
    information that I have, it is the only profitable route right
    now for Amtrak. And I would just like to ask you. What could
    you do on the other routes, how can you capitalize on that
    model of success there, if there is one, and--in order to
    improve the profitability of the other routes?
        And could you also just talk a little bit about ridership
    and general trends there, and what some of the weaker routes
    are? Thank you.
        Mr. Boardman. Sure, Chairman Massie. Did I pronounce that
    right? Massie.
        The first thing I think that I would like to engage you on
    is that it depends on defining profitability. And other people
    would engage me on this if I said the Northeast Corridor was
    profitable. And it is covering its costs above the rail and
    then beyond that, between $200 to $300 million above direct
    operating costs.
        But there is a report, and I gave all the committee a
    three-ring binder, which was basically a kind of primer of all
    the different kinds of things we thought might be helpful for
    the committee to understand. And one of the items in there was
    the critical infrastructure needs on the Northeast Corridor.
    This was just recently published. It is one of the best
    documents that provides an understanding of the projects that
    need to get done along the Northeast Corridor, and what the
    magnitude of cost is, and where we are in the process of doing
    that.
        This report probably documents in the neighborhood of $52
    billion worth of work. All the States of the Northeast, the
    Federal Government, and Amtrak are on this commission
    together--and really the report says this is how we could
    maximize the use of the corridor. So, for the Northeast
    Corridor--and I said it a little bit earlier--it is about the
    capital investment that improves the ability for us to raise
    revenues.
        When you begin to look at the rest of the system, there are
    some specific ones that are close to covering our operating
    costs. For example, the Auto Train. And then what is next up
    the list--and one of the slides that I had on there--you bring
    up, if you would, the slide on the most costly services, the
    second-to-the-last one, if you can, Rip. And what you will see
    there is when you really begin to look at all the services that
    we operate, the longer the trip, the longer the mileage, the
    lower the ability for us to make that a lower cost because of
    the labor cost, because of the time it takes--2 or 3 days, for
    example, to get across the country. Those become real
    impediments to being able to make an improvement.
        I think what we see there is we see a huge investment that
    is being made by the freight rail industry to really allow us
    to operate at a speed up to 79 miles an hour. But it doesn't
    give us the ability to have a business model that makes money.
        Mr. Massie. Given the infrastructure you have--I know we
    would all rather have some improvements--but focusing above the
    rails, I know you have said you would like to run Amtrak more
    like a business. And recognizing that it is not a business, it
    is actually a Government, you know, subsidized organization,
    what are some of the things you would do if you were running it
    like a business that you can't do right now? And please focus
    above the rails. Thank you.
        Mr. Boardman. Stop coming to hearings.
        [Laughter.]
        Mr. Massie. That is not an option.
        Mr. Boardman. I understand. What we really do, I think,
    is--and I think the reality here today is that Amtrak has been
    given many paths to go down over the years, whether it is from
    one Congress after another, or one administration and where
    they want us to go, all those different intersections.
        And I know you came in a little bit late, I don't know if
    you were here for my full presentation or not, but what I
    really tried to talk about is the place that Amtrak inhabits is
    the intersection of all those Congresses, the administrations,
    the DOTs, the labor unions, the freight railroads, all the
    supporters. And what you really find is that Amtrak never can
    be a private industry in the way that some private industry is,
    although I don't think Mr. Hamberger really has the opportunity
    to be that way today, either.
        But what we really have is an inability for us to grow
    anything because of a starvation of capital. For example, on
    any of our routes that you see out there, we can't replace
    equipment because there is not sufficient income to replace
    that equipment.
        Mr. Massie. Thank you. My time is expired. Yes?
        Mr. Nadler. What was the name of that document that Mr.
    Boardman referred to?
        Mr. Boardman. It is called the ``Critical Infrastructure
    Needs on the Northeast Corridor,'' Jerry, and it was published
    in January of 2013. And this committee, subcommittee, should
    have in your office a copy of this, along with our strategic
    plan, the vision for the high-speed rail, and the history of
    1971 to 1979's long distance system.
        Mr. Nadler. Thank you, thank you.
        Mr. Massie. Would you like to enter that as part of the
    record, or----
        Mrs. Napolitano. Request for the copy to----
        Mr. Nadler. Sure, why not?
        Mr. Massie. Without objection?
        [No response.]
        Mr. Massie. So ordered.
        [The report entitled ``Critical Infrastructure Needs on the
    Northeast Corridor'' can be found online at http://www.nec-
    commission.com/wp-content/uploads/2013/01/
    necc_cin_20130123.pdf.]
        Mr. Massie. I now yield 5 minutes to Mrs. Napolitano of
    California. Thank you.
        Mrs. Napolitano. Thank you, Mr. Chair. And this question is
    for all witnesses. This has to do with the quiet zones,
    something that is very key to my district, having--in my prior
    district, having most of the Alameda Corridor going through it,
    so 54 grade crossings and all that good stuff. And I am still
    hoping that maybe the railroads will increase their funding
    assistance to those grade separations, because it is the
    national corridor--the corridor of national significance for
    rail delivery of goods to the rest of the Nation.
        They are expensive. One of my cities had it installed
    several years ago, Pomona. And the train traffic and noise has
    abated in that area. Now I have two other cities who are
    looking at it. There is two trains of thoughts in the
    community. One, constituents say, ``Well, it is the constant
    noise of horns,'' especially if it is in the middle of a
    business district, or even a city compound. And they want maybe
    additional signs, gates, infrastructure to create those quiet
    areas.
        But then there is the other component of the family saying,
    ``Well, it is a safety issue,'' with children that have to
    cross. As you well know, in California streets divide cities.
    It isn't the long stretches of emptiness.
        So, part of what I would like to ask is, what is your
    opinion of those zones? And how can we bring the cost of those
    zones down so that cities may be able to access? And are there
    programs that you know of? What about the safety issues? And to
    that I will also add you have a volunteer group in the railroad
    of information to schools by volunteers. And I would like to
    know eventually in writing to this committee of where are we at
    with that. OK? Anybody.
        Mr. Boardman. You guys want to go first? Well, I will go,
    then, because I was the FRA Administrator that was in place
    when we put the horn rule back in, if you remember that. Now I
    am volunteering that for the lightening rod that it takes.
        But what has happened to us since is we have had a great
    growth in the number of, even now, the number of trespass
    deaths, crossing deaths. And we are very concerned, as an
    industry today, about those growing deaths.
        Mrs. Napolitano. Are you talking about the right-of-way?
        Mr. Boardman. Yes.
        Mrs. Napolitano. Which is where the volunteer group would
    come in and teach those in the area to be able to be careful,
    and instruct the locals about it. But that is where we don't
    know where you are at with that volunteer group.
        Mr. Boardman. We have--that is the Operation Lifesaver
    group. And I just put our chief of police on that Lifesaver
    group with the specific request and direction to look for ways
    to reduce these trespass incidents and also the crossing
    incidents. And I am beginning to work right now with North
    Carolina, because they have been a leader in sealed corridors
    that make improvements for this, for safety across the country,
    to adapt the kinds of things that you are looking at today in
    California to try to prevent the incursion into the crossings.
        But part of the problem today is the same thing we are
    having in every mode and in every place, and that is the
    distractions that occur by listening to your iPod, being on the
    tracks, walking. We had a recent CNN clip----
        Mrs. Napolitano. Which, again, sir, going back to the
    original intent, is to be able to educate the public and the
    children in the schools and the families about what causes
    accidents.
        Mr. Boardman. That is correct. But you also need to let
    people know that you are there with the train. And that was
    where the horn rule came in. It took 11 years to get it done.
        Mrs. Napolitano. Right.
        Mr. Boardman. It was the first thing that came out when I
    was the FRA Administrator. They were ready to go forward with
    it, and there was a lobbying effort to stop me from doing that.
        Mrs. Napolitano. Right. It is only in certain areas, sir,
    not just--and I am talking about downtown areas, where there is
    a need to be able to protect the community, protect the
    business, protect City Hall. I have been here at meetings with
    City Hall, and there is a train going by, honking, while they
    are trying to talk openly. So there are things we need to
    mitigate.
        Mr. Boardman. I usually find that CSX, whenever I am trying
    to give a speech along the CSX, they come along and blow the
    horn. But, yes, I understand that. But clearly, today there is
    an ability for the quiet zone to exist, but it does cost money
    for the community to make that happen.
        Mrs. Napolitano. Amount? Do you have an amount, sir, any
    more? Is the cost coming down?
        Mr. Boardman. It really depends on the specific crossing
    that we are talking about.
        Mrs. Napolitano. Anybody else?
        Mr. Hamberger. If I could just clarify for the record, the
    grade crossing accidents and incidents continue to decline. In
    fact, I have the preliminary statistics here. For 2012, highway
    rail incidents are down 8 percent. The problem is primarily
    trespassers or pedestrians in the right of way.
        Mrs. Napolitano. Understood. My time is up, Mr. Hamberger.
    May I ask that you reply in writing on that issue?
        Mr. Hamberger. Yes ma'am.
        Mrs. Napolitano. And also on the issue of you have created
    a senior executive level position. When, where, and how? We
    haven't heard any more information on that. And with that,
    please would like to have a response on that.
        Mr. Hamberger. Yes ma'am.
        Mrs. Napolitano. Thank you, Mr. Chair.
        Mr. Denham [presiding]. Thank you. And we will be having a
    second round of questions. I will lead that off. I would like
    to switch a little bit to labor, starting with Mr. Hamberger.
        How important is labor to your industry? And what are some
    of the ways you believe the industry can grow jobs over the
    next decade?
        Mr. Hamberger. Well, as I mentioned earlier, we have and
    are blessed with a very professional, very well-trained labor
    force. The last number I saw was that the average tenure of our
    employee base is 13 years. We are faced with a major
    generational shift, however. Last year it was 15,000 new
    employees needed to be hired, to a great extent because of
    retirements. We are projecting hiring 11,000 new employees this
    year. But in 2011 we thought it would be 15,000 and it turned
    out to be 20,000.
        So, what we are hoping is that we can continue to recruit
    based on the same level of commitment. Once people join our
    industry, they do stay with it. As James Stem said in his
    opening statement, it is a career choice, not just a job. We
    are doing everything we can through job fairs to let people
    know that those jobs are out there. We hope to grow, obviously,
    the size of the employee base by growing the industry itself.
        Mr. Denham. Thank you. And, Mr. Stem, have members of the
    UTU been generally satisfied with their association with
    Amtrak?
        Mr. Stem. Yes, sir. We not only support Amtrak--that is a
    historic statement--I can say--and this is not a promotion of
    him, personally--Mr. Boardman and his staff have brought a new
    level of credibility and stability to Amtrak. And the
    relationship that Mr. Boardman has established with this
    committee, including the former chairman, is a direct
    relationship--a direct indication that Mr. Boardman has been
    good for Amtrak, has been good for our employees.
        Mr. Denham. Thank you. That is good to hear. How about
    freight rail? How about Mr. Hamberger?
        [Pause.]
        [Laughter.]
        Mr. Hamberger. You had to go there.
        Mr. Denham. This is--again, we are trying to get everything
    out this first hearing. We figure we would----
        Mr. Stem. Well, I hate not to give you the controversy that
    you are seeking, Mr. Denham, but labor has an agreement with
    our freight railroads. It lasts through the mid-2016 range. We
    have invested in many different types of partnerships with the
    freight industry. Mr. Hamberger has helped with that
    cooperation and that relationship himself, personally.
        And the way that we think we are going to increase
    employment in the industry is to utilize the industry as this
    committed intends. We grow the industry, we grow the
    opportunity.
        If we had a national transportation policy, there is no
    doubt in my mind, there are many people in this room that have
    been promoting a national transportation policy for decades.
    And if we had a national transportation policy, the utilization
    of our fuel resources would be given much more credibility than
    it is today. We would not be having the debate about highway
    congestion and truck size and truck weights and the size of
    intermodal containers if we had that national transportation
    policy.
        So, I personally believe and agree with many people on this
    committee, that we are on the verge of a rail renaissance. And
    that is good public policy for this Nation.
        Mr. Denham. Absolutely. Thank you. Mr. Michaud?
        Mr. Michaud. Thank you very much, Mr. Chairman, and thank
    you for allowing for questions to be submitted for the record,
    because I think that is very important. As we heard Mr.
    Hamberger actually talk to--respond to Mr. Walz's question when
    you were not in the room, I never talked about truck size and
    weight. It was just truck weight. There are two different
    issues.
        You also had mentioned the fact that you are being
    subsidized. Actually, in the bill that is being--bipartisan
    bill that is being supported, it actually increases the fee
    because of damage for the bridges. So there are two different
    issues here, Mr. Chairman. And I think it is important that we
    do not try to mix those questions, issues, because it is being
    paid for and it allows the States to decide, because every
    State is different. It is not mandating that the States have to
    go with that higher weight. Because each State is different.
    Because in Maine we do have a pilot program for 20 years
    because of the problem of trucks going down into cities. That
    was a huge safety issue, a huge problem. So I think States
    should have the flexibility to decide, and the option to
    decide.
        My question, actually, is for Mr. Stem. In your prepared
    testimony you indicated that all transportation, particularly
    the Bakken fields in North Dakota, has been a boon for the
    freight rail. At the same time you indicated your concerns that
    possible adjustment in truck weight laws would somehow result
    in more trucks on the road. Is that correct?
        Mr. Stem. Yes, sir. Both of those statements are included
    in my testimony that I submitted.
        Mr. Michaud. OK. So let me ask you this question. Are you
    aware what the truck weight limits hauling oil to your railroad
    terminals near the field is? Do you know what the truck weight
    limit is?
        Mr. Stem. No, sir. I can honestly say I am not aware of
    that.
        Mr. Michaud. OK. Well, it is over 105,000 pounds. So, under
    your scenario, if you go to the 80,000 limit, then actually you
    would be forcing more trucks onto the roads. And that is a
    concern that I have, is when I hear the discussion about safety
    issues, about who is subsidizing who, it depends on what State
    you are in. So under that very scenario, we would actually be
    increasing more trucks in that particular State. And that is a
    big concern that I have. And I believe strongly in freight. I
    come from the manufacturing sector, in a paper mill. So I know
    how important freight is. But I also know how important it is
    to have different options available. And what I have seen,
    quite frankly, in Maine, is because of the unreliability of
    freight rail, manufacturers are having to go to trucks. They
    don't want to, but they have to go there because of the
    unreliability of freight. And that is very concerning. And I do
    believe that we have to have the options.
        And on the rail, I believe one of the reasons why they are
    so opposed to increasing the weight limit is because they do
    not want to have that additional pressure to offer more
    competitive rates, or have to focus on reliability. And not all
    rail lines are at fault, but there are some that are terrible
    in that regards. And I think it is important that we focus on
    those particular issues.
        And if you go right back to the report that I was
    questioning Mr. Hamberger earlier that was done in 2010, it is
    contradictory, when you look at his statements, as far as it is
    very clear in this report that if rail has more competitive
    rates, they are more reliable, then actually, the trucking
    industry will lose, as far as overall customers. So I think
    that is very important. And I will be submitting questions, Mr.
    Chairman, for the record.
        And hopefully we can get answers to those specific
    questions, rather than trying to lump everything together,
    because there is a different issue with truck weight and size.
    I am not talking about the size. Mine is primarily the rates,
    allowing the States the option to deal with that on their own,
    if they would like. And I think it is also disconcerting when I
    hear people say, ``Well, you can't do it because it is going to
    allow more trucks on the road,'' when actually those who are
    speaking the loudest, they already have a much higher weight.
    This is a safety issue, it is an environmental issue, it is an
    economic issue. And I think it is very important that we look
    at it as that, and not be afraid to work out on compromises
    which are extremely important.
        And I see my time has run out, Mr. Chairman, so I want to
    thank you for allowing us to submit questions for the record,
    because I will have plenty of questions to actually get at the
    very issue of weight. Not the size issue, but the weight issue.
    And there have been plenty of studies done in the past from
    Department of Transportation, not only at the Federal level but
    also at the State level, that--but would be interested in
    making those public, as well. So thank you very much, and yield
    back.
        Mr. Stem. May I offer a brief response to the question?
        Mr. Denham. I will allow it, Mr. Stem.
        Mr. Stem. Mr. Michaud, thank you for the question. The--my
    inclusion of the mention of the Bakken oil field mobile
    pipeline was an indication of the flexibility of the industry
    dealing with the current needs of our industrial movement
    around the country. I was not aware that an oil tanker could
    leave Williston, North Dakota, weighing 105,000 pounds and
    deliver that oil to a refinery in Philadelphia, Los Angeles, or
    in Houston. I was not aware of that. That was never the point
    of that comment.
        My comment about truck size and truck weights also included
    a concern that the size of the truck would soon surpass the
    allowable international interchange, so that if the truck gets
    so large you can no longer load it on a ship to go overseas. So
    then you would start another problem of having multisized
    containers available. But I will be glad to provide written
    response to that.
        Mr. Denham. Mr. Massie?
        Mr. Massie. Mr. Stem, what role can the United
    Transportation Union play in reducing costs at Amtrak and at
    freight rail?
        Mr. Stem. Mr. Massie, thank you for the opportunity. We are
    participating in that now. Cost reductions and being cost
    effective are part of what we do. Our agreements that we have,
    both with Amtrak and with the freight railroads, provide
    economic viability for them.
        If you will check the freight railroad stock reports--and I
    am a stockowner--you will find that our freight railroads are
    doing very well, largely because of the workforce that they
    have that is very professional that is actually working for a
    mere pittance.
        Mr. Massie. What else can you do, though? Are there any
    plans for helping these gentlemen reduce costs?
        Mr. Stem. Well, increased productivity constantly is on the
    table any time you talk about career opportunities. That would
    include pay and benefits. We are always open to productivity
    improvements.
        Technology, along with downsizing of the industry, has
    significantly reduced employees. As I mentioned before, we have
    fewer than 50 percent of the employees moving--compared to
    1980, moving twice as many railcars around the country today.
    By any measure, freight and passenger rail employees--and that
    includes the maintenance employees--are the most productive
    members of the workforce that we have in this country.
        Mr. Hamberger. If I might add, Mr. Massie?
        Mr. Massie. Please.
        Mr. Hamberger. It is not my role, thank goodness, to
    negotiate the national handling contracts with the unions. But
    in this past round, as has been, I think, the historical norm,
    UTU reached a voluntary agreement. They were the first to reach
    a voluntary agreement with the freight railroads addressing
    pay, health care, and work rules. And so have most of the other
    unions all come forward with an air of trying to reach an
    agreement. So just like that to be on the record for Mr. Stem.
        Mr. Stem. Thank you, Mr. Hamberger. And, Mr. Massie, to
    translate that into a direct response to your question, Mr.
    Hamberger is correct. We did reach a voluntary agreement, which
    means that the railroads and the employees agreed on a long-
    term package of continued employment, continuation of progress
    for the industry. That included many productivity improvements.
        Mr. Massie. Thank you very much. Next question is for Mr.
    Boardman. How does and can Amtrak maximize its real estate
    assets around the train stations and development to create
    additional revenue streams for Amtrak? Are there any creative
    ways to create more revenue so you don't have to come here and
    testify?
        Mr. Boardman. We are actually doing that now, especially
    along the Northeast Corridor. We have a plan for the Washington
    Union Station, an unfunded plan. We have a plan for Moynihan
    Station in New York City. It is a partly funded plan. We have a
    lot of real estate developers that are looking at and pushing
    us, especially in New York City, for access to the folks that
    we have, so they can build their real estate development. We
    have an interest by the 30th Street Station in Philadelphia, on
    a regular basis, for increases in real estate development and
    other activity. And we have it at Baltimore, and any station
    that we really own--Chicago being another one.
        We actually--when we look at what we cover, in terms of our
    cost, we cover about 79 or 80 percent of our operating costs
    through the fare box. And yet we cover about 88 percent of our
    costs with all of our revenue. Most of that additional revenue
    is real estate. We have done--and we did for the last
    chairman--we looked at all of the real estate available along
    the Northeast Corridor. And most of it is not developable real
    estate, from the standpoint of creating revenues for us. Most
    of it has to do with supporting the operations, whether it be
    some of the freight operations that operate along the Northeast
    Corridor, or our own operation.
        Mr. Massie. But is it safe to say you are maximizing
    opportunities for things in those locations? For instance, for
    cell tower leases and what not?
        Mr. Boardman. Yes. We have--when we find a place that we
    can do that safely, and it is a benefit for Amtrak, we
    oftentimes have to put it out for competition for others that
    might be interested for it. But yes, we are doing that.
        Mr. Massie. Thank you very much. My time has expired.
        Mr. Denham. Thank you. Mrs. Napolitano.
        Mrs. Napolitano. Thank you, Mr. Chair. I am sorry, I may
    not have made myself clear on the senior executive level
    position for Amtrak that was in the recent reorganization. I
    would like to know in writing, and will share it with the
    committee. Is it in place?
        And, of course, can Amtrak make sure that the State-
    supported services program will continue to thrive? OK?
        Mr. Boardman. You want that back in writing?
        Mrs. Napolitano. Yes, please.
        Mr. Boardman. Yes, ma'am.
        Mrs. Napolitano. Because that is going to take a little
    more time, and I don't want to spend that much time on it.
        In California you have three of the most used services,
    ridership records. And the nine records--Amtrak has set nine
    ridership records in the past 10 years. You have done
    magnificent. You have decreased your operating needs in half
    since 2004 and cut your debt in half since 2002. But what other
    improvements do you have in mind, and how can we help you get
    there, to be able to increase and get people off the road?
        And talking about the impact on roads, the weight damages
    the infrastructure of the roads. And then the citizens have to
    end up paying for that, the States. So, if you would, please.
        Mr. Boardman. Thank you, Congresswoman. First of all, the
    investment in the Northeast Corridor infrastructure--and we
    have already got this in the record, so I won't bring it back
    again right this minute--but if those investments are made, our
    revenues will go up substantially, because we will have a
    greater capacity.
        The PRIIA legislation also has required not just the State-
    supported services, which I will get back to you in writing,
    but we also have an obligation to begin to look at what the
    commuter operators along the Northeast Corridor really provide
    in covering some of the cost of the capital on the corridor and
    the capacity that they take. And that is ongoing right now. We
    are making those kinds of improvements.
        We work pretty solidly with operating agreements with all
    of the freight railroads. That is also coming due, and we are
    in the middle of talking and listening, quite frankly, to the
    freight railroads today about what they see for reauthorization
    for the future. So we are identifying the kinds of things that
    we think are necessary for us to make the kinds of improvements
    that are being looked for, for on-time performance and
    improvement for the investment and our fleet that is going to
    be necessary for the future.
        Mrs. Napolitano. And also the investment in the
    infrastructure, ensuring that it is going to be able to handle
    the additional capacity. Am I correct?
        Mr. Boardman. Yes, that is correct. That is one of the
    things that the freight railroads are particularly interested
    in. With the investments they are making in capacity, they want
    to know what that means in terms of what Amtrak might want for
    the future. And that becomes a rub, just kind of like the truck
    weight issue for the freight railroads.
        Mrs. Napolitano. Well, I would like to hear Mr. Hamberger's
    side of being able to allow some of the transit, Amtrak
    transit, on rail lines. I know that it doesn't pay off as well.
        Mr. Hamberger. Well, as you know, under the statute, Amtrak
    has a right of access for avoidable cost. And your point is
    exactly right on. Avoidable cost is not fully allocated cost.
    But that is the deal that was struck back in 1970 and 1972, so
    that we are good partners, I think, with Amtrak.
        And, of course, part of that deal also is preferential
    dispatching, which is also part of the way we operate the
    railroad.
        Mr. Boardman. And we fight about that regularly.
        Mr. Hamberger. Yes, yes.
        Mrs. Napolitano. Well, with the new technology, will it
    make it easier to be able to align both?
        Mr. Boardman. Absolutely. As a matter of fact, part of the
    discussion we really have today with the new technology we are
    using--and we have a much better idea today with WiFi and
    eTicketing where we are in terms of the schedule itself. And so
    do the dispatchers.
        And part of the discussions we have begun to have with the
    freight railroads is they want to simplify that, as well. They
    want to find a way to get us on their railroad and off their
    railroad as quickly as they can. Because in some ways, some of
    them really believe that Amtrak has kind of become the canary
    in the coal mine. If they can't move us, then they have a
    problem with their railroad.
        Mrs. Napolitano. Well, there had been at one point several
    derailments in my area, or at least close to my area, and I got
    into that very heavily several years ago. And I am hoping that
    the new technology has been able to allow the railroads, as
    well as Amtrak, to understand how critical the replacement of--
    or actually, the identification of rail that may have hairline
    cracks or anything that is really critical to public safety,
    both on the rail and in Amtrak.
        So, with that, I thank you, Mr. Chair----
        Mr. Hamberger. As I recall, it is a broken angle bar that--
    --
        Mrs. Napolitano. I still haven't seen that, sir.
        Mr. Hamberger. Yes, many years ago. Actually using laser
    and sonar, we now have reduced to a great extent the number of
    accidents caused by broken rail, as well as broken wheels and
    broken axles. So----
        Mrs. Napolitano. We would love to have a report on that,
    Mr. Hamberger.
        Mr. Hamberger. I would be delighted to do that. Thank you.
        [The Association of American Railroads inserted the
    following information for the record:]

            The railroad industry has made dramatic progress in
            reducing the number of broken rail derailments. In
            fact, broken rail train accidents on Class I main line
            track have declined 62 percent since 2004.

            This progress begins with improved manufacturing
            processes. The manufacturers of steel rails have
            continued to improve the overall quality of the rails
            to reduce the potential of internal rail defects.

            Next, in addition to improved rail quality, railroads
            have contributed significantly to reducing the
            potential for defective rails by increasing the amount
            of continuous welded rail (CWR) installed throughout
            the North American railroad network. Most main line
            trackage and a significant percentage of secondary and
            yard trackage is composed of welded rail rather than
            jointed rail. This has led to a dramatic reduction in
            the number of rail joints which could in turn result in
            rail defects.

            Additionally, railroads attempt to mitigate rail
            defects and service failures through regular rail
            inspections. A general visual inspection of the rail is
            usually performed several times per week over most main
            line trackage; however, a visual inspection by a highly
            qualified track inspector cannot detect all of the
            internal and external rail defects. Thus, ultrasonic
            testing is performed by railroads on a routine basis.
            The ultrasonic method of testing rails in service
            attempts to target a wide variety of internal and
            external rail defects, including at least:

                 LTransverse defects
                 LDetail fractures
                 LEngine burn fractures
                 LCompound fissures
                 LDefective rail end welding
                 LBolt hole cracks
                 LVertical split heads
                 LHorizontal split heads
                 LHead and web separations
                 LPiped rail

            The industry will continue to do all it can to improve
            safety by reducing rail defect accidents even further.

        Mrs. Napolitano. Thank you, sir. Thank you, Mr. Chair.
        Mr. Denham. I would like the committee to notice that we
    are going to finish exactly right on time today. It is a good
    way to start our first hearing. And certainly want to thank,
    once again, all of our witnesses here today. Certainly been
    informative for a lot of new Members. Appreciate all of the
    supplemental material that each of you has provided. And, as
    well, we are looking forward to having more questions answered
    in writing.
        At this time I would like to ask unanimous consent that the
    record of today's hearing remain open until such time as our
    witnesses have provided answers to all of the questions that
    may be submitted to them in writing, and unanimous consent that
    the record remain open for 15 days for any additional comments
    and information submitted by Members or witnesses to be
    included in the record of today's hearing.
        [No response.]
        Mr. Denham. Without objection, so ordered.
        I would like to thank again each of our witnesses, again,
    for their testimony.
        And if no other Members have anything to add, the
    subcommittee stands adjourned.
        [Whereupon, at 12:59 p.m., the subcommittee was adjourned.]