including the world's richest man, Warren Buffet -- placing billions of dollars on old-line companies like Union Pacific and Norfolk Southern. The reason behind the trend is fairly obvious. Most investors have begun to believe that today's high fuel prices are permanent (see the interview with Chris Nelder, below, for more). In addition, trains are seen as a good way to reduce greenhouse gas emissions, as one train can tote as much freight as hundreds of trucks, or as many people as thousands of cars. There's one small hitch: The majority of our rail system is decades old. There's now record ridership on many urban lines, including Silicon Valley's own Caltrain, but outside the cities the ride is often dismal. Try taking Amtrak, the nation's passenger rail system, nearly anywhere outside the metropolitan corridors of the Eastern US, and you'll likely be disappointed (and late to wherever you're going). Most people don't see or think about freight, but problems are also common on those lines. To really use trains, we need a new rail system. One example could be the proposal for a high-speed link between San Francisco and Los Angeles, although a guest columnist on VentureBeat condemned the idea, it seems clear that some form of new rail investment is the way to go. But the million dollar (or more) question is, who will pay? In California, a $10 billion bond is being proposed to kick off the project, which would cost at least $40 billion in the end. Other states, not as rich or as heavily populated, certainly won't have the option. Nelder suggests that private money might fund new lines, and indeed, Congress is considering opening up rail for proposals, starting with a track from New York to Washington, D.C. A full privatization would seek to attract large consortiums of investors. To understand how that has worked in the past for other capital-heavy industries, try reading the classic (and exhaustive) Neal Stephenson article Mother Earth Mother Board, which details how private investors helped lay world-spanning transmission lines for the Internet in the 90s. As venture capitalists might readily point out, billion dollar consortiums are not a typical place they place their money money. Even late-stage private equity investors might balk at the government regulation encumbering such projects. However, related opportunities may appear for investors. Consider this: If we really manage to build out a new rail infrastructure, aside from laying high-speed track, how will we modernize it? Passengers need to get to and from stations; freight needs to move efficiently and reliably. One example of a technology play could be personal rapid transit, or PRT, which has often been touted for getting people to and from rail. PRT is a form of non-stop transportation, using small, independent vehicles on a network of specially-built guideways, which people can use whenever they want.
But nearly every PRT project ever begun has been a boondoggle, with soaring costs and technological mishaps. Only one exists -- in West Virginia, no less -- with another system, which may yet prove the concept, being built at Heathrow. Yet PRT itself relies on tracks; advances in driverless cars, like those seen in the DARPA Grand Challenge, may become a better automated system for getting back and forth to trains. For freight, there are other associated systems. RFID for tracking large shipments is useful, and automated security is needed for the cars (though the ghost of Jack Kerouac might object). Refrigeration and powering systems for cars that need them can always use improvement. And the logistics of moving massive numbers of freight trains around, while now handled by the big rail companies, could be more effectively tackled by a startup. It's easy to argue that the US, with its massive, empty expanses and traditional reliance on cars, will never have an effective train system. But if fuel prices climb in coming years, new rail may move from being a marginal choice to the best one available. Given the decades-long periods required for such large projects, the time to start thinking about them is now.