As oil rises, Americans rediscover the railroad

By Jason Szep

BOSTON (Reuters) - As oil prices spike, many Americans are rediscovering the railroad.

Amtrak, America's struggling passenger railroad, saw record numbers in May when ridership rose 12.3 percent from a year earlier, and ticket sales climbed 15.6 percent, according to company data.

Amtrak President Alex Kummant said the numbers point to a sixth straight year of record passengers. He estimated a more than 11 percent rise this year on its 21,000 miles of track, building on last year's 26 million passengers.

He attributes about half that growth to higher gas prices. "It depends on the service but certainly our ridership growth is linked to the fuel prices," he said in an interview. "We are up against capacity limits."

The Bush administration has sought to scrap direct federal funding for Amtrak, a for-profit federal corporation that has bled red ink since its 1971 creation. Its backers contend that passenger rail services in other countries also lose money.

The White House threatened on Monday to veto legislation to fund Amtrak for the next five years, saying the U.S. House of Representatives failed to include language that would make the railroad more accountable.

The House legislation would authorize Amtrak funding of $14 billion and set up a program of federal matching grants to states for projects to improve passenger service, an arrangement Kummant says is crucial for any expansion.

"That would have a huge impact," Kummant said. "We are in a different world than even just three or four years ago with gas prices at these levels, with the congestion we face on the highways and with the difficulty in air travel."