Three Transportation Surprises In 2022

Christmas and New Year celebrations are behind us, and kids have jettisoned their educational toys and are busy playing with their new video games. The rest of us are wondering when Omicron will be over, when schools will reopen, and whether we will be forced to return to the office full time. What is in store for transportation in 2022?

Slower Infrastructure Construction.  With the passage of the trillion-dollar Infrastructure Investment and Jobs Act, many are thinking that infrastructure should improve this year. However, it will take the U.S. Department of Transportation time to spend the $100 billion in discretionary funding for 2022. As this goes to press, one quarter of the 2022 fiscal year is already over. The Transportation Department needs to set metrics to award funds for new projects, issue Notices of Funding Opportunity and Requests for Proposals, evaluate the proposals, and, finally, give out the funds. And this does not even count tweaks to appease the political sensibilities (such as keeping Senate Majority Leader Chuck Schumer happy about funding for roads, bridges, and tunnels going into New York City).

Similarly, States will have to decide how to spend their share of what is known as formula funds—money that they receive automatically. They also need to consider what additional grants to apply for from the Transportation Department. Unless the projects are already approved and ready to go, States will have to go through a lengthy decision-making process, including environmental reviews. Once projects are approved and decided, a shortage of construction workers and high prices for steel and lumber could also slow down construction. All these steps could delay some planned 2022 spending until 2023 or, for some projects, 2024.

Hold the Electrification. Teslas are selling well, and Mercedes is rolling out its Vision EQXX sports car with a range of 621 miles and a price of $150,000 at the Consumer Electronics Show this week. But this is not enough to put America on a path to half of new vehicle sales being zero emissions vehicles by 2030, as President Biden called for in an August Executive Order. Nor is it enough to make all of California’s new vehicle sales zero-emission by 2035, as the Golden State’s Governor Newsom called for in a January 2021 Executive Order. The new charging stations funded by the Infrastructure Act will not be in place by the end of the year—and even if they were, many Americans will still be concerned about vehicles running out of range and having to be towed to a charging station. Look for battery-powered electric vehicles to generate a lot of buzz but not a significant share of total vehicles sold in 2022.

More Air Delays as Wireless Companies Clash with FAA. The U.S. Department of Transportation has supposedly made peace with AT&T and Verizon, in exchange for a two-week delay in rolling out new 5G services. New 5G transmitters cause potential interference with planes’ radio altimeters, a device that tells pilots how far they are above ground. Radio altimeters are tied into flight navigation systems.  In a January 3, 2022 letter, Transportation Secretary Pete Buttigieg and Federal Aviation Administration Administrator Steve Dickson wrote to the wireless companies, “we are confident that your voluntary steps will support the safe coexistence of 5G C-Band deployment and aviation activities, helping to retain America’s economic strength and leadership role around the world.”

The term sheet attached to the letter, however, stated that the FAA will “work to issue [Alternative Methods of Compliance] as filed with the FAA by aviation stakeholders to allow for operation of aircraft to the extent permissible.” This means that the FAA may continue to request that aircraft cancel flights or reroute to nearby locations if the radio altimeters are in danger of not working. The compatibility of 5G services with navigation systems still needs more research to identify which precise radio altimeters are affected by 5G transmitters. Replacing these radio altimeters will certainly take beyond 2022.

It’s always risky to forecast the future, and events in transportation may well be swamped by rising inflation, the November midterms, and Chinese and Russian invasions of Taiwan and Ukraine. Still, transportation affects all of us, and, at the start of a new year, it’s best to be prepared.