Transportation Policy

As Hyperloop Projects Advance, So Do Calls for Subsidies

Trump's infrastructure proposal includes $20 billion for projects like the Hyperloop.



The idea of connecting America's cities via Hyperloop—a high-speed train propelled at breakneck speeds through vacuum tunnels—is being taken increasingly seriously. So is the possibility that the technology will get taxpayer support.

Just this week, Elon Musk's Boring Company secured a construction permit from the District of Columbia as part of its plans to build a Hyperloop line between the nation's capital and nearby Baltimore. The company had already received a permit to dig a 10-mile tunnel for the project from the Maryland Department of Transportation.

In the Midwest, meanwhile, the company Hyperloop Transportation Technologies inked an agreement with the Illinois Department of Transportation (IDOT) and the Northeast Ohio Areawide Coordinating Agency to study the feasibility of a Hyperloop between Chicago and Cleveland.

So far, these projects have not relied on government support. An IDOT spokesperson has stressed that no state finding was involved in the deal. In Maryland, Transportation Secretary Pete Rahn told local radio station WAMU, "The development of this project is being done entirely by the Boring Company and has zero state and federal dollars. This is a private company undertaking a project with private funds."

But as these projects progress, taxpayer dollars may soon follow.

In January, a bipartisan group of U.S. representatives from Illinois, Ohio, and Pennsylvania sent a letter to President Donald Trump urging him to spend $20 million creating a Hyperloop Transportation Initiative. Last year, the Ohio State Legislature passed a resolution expressing support for the same idea.

Hyperloop Transportation Technologies' press release about its feasibility study cites both the letter and the resolution favorably.

It would be easy to dismiss all this as empty talk were it not for the president's infrastructure package. Of the $200 billion in federal spending that Trump has proposed as part of the deal, $20 billion would be reserved for "transformative projects," described as "ambitious, exploratory, and ground-breaking project ideas that have significantly more risk than standard infrastructure projects, but offer a much larger reward profile."

Projects that fit this description could get as much as 30 percent of their demonstration costs, 50 percent of their planning costs, and a full 80 percent of their construction costs from the feds.

If that idea is included in the final legislative package, it's not hard to imagine the money landing in the pockets of Hyperloop project sponsors. White House advisers have already personally expressed their support for Musk's Hyperloop projects.

If that happens, it will be a shame—not just for Hyperloop skeptics but for Hyperloop fans.

The technology is still very much in its infancy. Prototypes have achieved speeds of only 240 miles per hour, despite promises that future Hyperloop vehicles will reach upward of 700 miles per hour. Dumping huge amounts of federal money on such a speculative technology risks costing taxpayers a bundle for an idea that turns out to be a dud.

And even if Hyperloops do prove to be part of our transportation future, public money always comes with strings attached. Otherwise economically feasible projects could be derailed by layers of regulation and politically expedient changes.

Something similar happened with California's high-speed rail. What was once supposed to be a straight rail line from San Francisco to Los Angeles was, thanks to politically motivated demands, rerouted through the state's Central Valley, creating all sorts of complications, delays, and cost overruns.

Government officials should let the technology evolve, not try to transform it with a ton of tax dollars.