Oil Firms Hit by Hackers From China, Report Says

By NATHAN HODGE And ADAM ENTOUS
Source: Market Watch
Hackers who appear to be based in China have conducted a "coordinated, covert and targeted" campaign of cyber espionage against major Western energy firms, according to a report expected to be issued Thursday by cybersecurity firm McAfee Inc.

Law-enforcement agencies said they are investigating the incidents, which McAfee said have been going on at least since late 2009 but may have started as early as 2007. The company said the attacks, which they dubbed "Night Dragon," were still occurring.

McAfee said the hackers targeted five multinational firms, but wouldn't identify the companies by name because some of them are clients. McAfee said it was sharing the findings "to protect those not yet impacted and to repair those who have been." Asked if they were victims of the hacking, BP PLC and ExxonMobil Inc., among other large oil companies, declined to comment. Chevron Corp. said it wasn't aware of any successful hacks into the company's data systems by Night Dragon.
Sensitive Internal Documents Taken

According to McAfee, the cyberattacks successfully took gigabytes of highly sensitive internal documents, including proprietary information about oil- and gas-field operations, project financing and bidding documents. And that pattern of espionage, the company said, should raise fresh alarms in the corporate world about information theft.
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"While Night Dragon attacks focused specifically on the energy sector, the tools and techniques of this kind can be highly successful when targeting any industry," the report states.

McAfee and its competitors have an incentive for publicizing threats like Night Dragon because they are in the business of selling cybersecurity services. The company has informed the FBI of its report, which said it was investigating the attacks and took the matter seriously.

U.S. intelligence agencies have warned in recent years that China is developing sophisticated cyber warfare strategies which could be used to attack governments and key industries. China, the second-largest economy after the U.S., is keenly interested in competing for energy resources around the world to fuel domestic growth.

"It's important to get this out in public discussion, so companies can identify that kind of threat," said Ron Plesco, CEO of the National Cyber Forensic Training Alliance Foundation, a group that tracks cybercrime threats. "And sharing information adds toward the ultimate goal of mitigation."

The Night Dragon attacks used hacking tools that exploited Microsoft Corp. operating systems and remote administration tools to copy and extract information, according to McAfee. It appears to have been designed purely for spying. "We saw no evidence of sabotage activities" in these attacks, said Dmitri Alperovitch, vice president of threat research at McAfee.
Trail Leads Back to China

Mr. Alperovitch said researchers were able to trace data taken from those companies back to Chinese Internet addresses in Beijing. The hacking tools used were mainly of Chinese origin, he said and the hackers didn't take steps to cover their tracks.

"These individuals almost seemed like company worker bees," he said. "They operated on a strict weekdays, nine-to-five Beijing time-zone schedule."

Through forensic research, McAfee identified one individual who appeared to provide the external servers used by the hackers. McAfee identified this individual as Song Zhiyue, based in Heze City, Shandong Province, China. It is unclear to what extent Mr. Song might have been aware of the espionage. McAfee believes many actors participated in these attacks.

Mr. Alperovitch said it was unclear if the attacks were done with any official sanction. "The facts point to Chinese hacker activity that is organized, so [it is] potentially directed either by the private sector or the public sector. But it's impossible for me to know for sure which one," he said.

Wang Baodong, a spokesman for the Chinese embassy in Washington, said he had no knowledge of the report, but added that past allegations about Chinese hacking had been raised unfairly. "China has very strict laws against hacking activities, and China is also a victim of such activity," he said.

A 2010 Defense Department report to Congress on Chinese military capabilities said computer systems around the world, including U.S. government networks, had been the target of intrusions that appear to originate from China. The report added that it was unclear if those intrusions were done at the behest of the Chinese military of elements of the Chinese government.
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Early last year, Google Inc. took the unusual step of complaining publicly about sophisticated cyberattacks that it claimed had originated in China. McAfee investigated those attacks, which it dubbed Operation Aurora. Leaked U.S. diplomatic cables collected by the WikiLeaks website included allegations that the attacks were ordered by top Chinese leaders.
—Russell Gold contributed to this article.

The best ways to fund your MBA

Dig deep: The best ways to fund your course

MBAs can open the door to high-flying careers – but they don’t come cheap, warns Michael Prest

Source: The Independent
Thursday, 10 February 2011
After a house and a car, an MBA is one of the biggest single outlays you're ever likely to make. A well-ranked UK school typically charges around £20,000 for a full-time, one-year degree. This rises to about £50,000 at the London Business School, where courses take 15 to 21 months. For most graduates it's a good investment; career prospects and commensurate earnings increase significantly. But how will you fund it?

All schools urge candidates to think carefully. "We advise our candidates that a variety of sources of funding are available. They should spend time looking at options as well as choosing the right school," says Stephen Chadwick, the MBA programme director at London Business School. The school's website lists more than 150 sources of financial assistance, many of which are available to applicants of any UK school.

There are four main sources of funding: yourself, your employer, bank loans and scholarships. Recent research by the Association of MBAs (AMBA), one of the leading bodies that accredit business schools, says that about half of MBA students fund themselves; 32 per cent are sponsored by a company; about 10 per cent are financed mainly by bank loans; 7 per cent chiefly by scholarships; and 1 per cent by redundancy payments.

Despite the recession, this breakdown hasn't changed. "We've always found full-time students generally self-fund. I wouldn't say there's much of a change," says Elaine Kay, MBA programmes manager for Nottingham University Business School. Self-funding, though, is an umbrella term. Apart from a student's savings, it includes family help.

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This is especially true of students from outside the EU. "There are some parts of the world, like the Gulf, where funding doesn't seem to be an issue," says Mary Landen, director of MBA admissions at Leeds University Business School. Indian families also have a tradition of paying for members to study abroad to further their fortunes.

Employers have long been an important source of fees for business schools, mainly financing employees to study part-time for executive MBAs. Applications for these degrees have held up well given the economy and a tendency for employers to demand employees contribute more towards their studies. "Some employers see help with an MBA as a substitute for a pay rise," says Lindsay Duke, postgraduate student recruitment manager at Durham Business School. "Up to 18 months ago, most executive MBAs were getting part-funding at least. Now some employers are being harsh, offering no funding or time off and requiring employees to study in their annual leave."

Nonetheless, some companies are generous as ever. Vodafone and Santander sponsor students from anywhere in their companies to study for the full-time MBA at London Business School. Companies are showing more interest in sponsored MBAs, degrees tailored with a business school specifically for a company's employees.

"We've seen more demand for in-company MBAs," says Melissa McCrindle, head of marketing for Strathclyde Business School. She thinks companies may see these as a more economic way of training managers that standard MBAs; they also reduce the risk of employees leaving for greener pastures with their new degrees.

Loans can rescue those unfortunate enough to lack deep pockets or a generous boss. AMBA runs a popular scheme with Barclays that offers preferential terms of below-market interest rates and a repayment holiday. All AMBA-accredited schools can advise candidates on how to apply and the details and an application form are on the association's website. Some schools have their own arrangements with banks, as London Business School has with HSBC. Prospective MBA students may also be eligible for help under the government's career development loan scheme, provided through Barclays, the Clydesdale Bank, the Co-operative Bank and the Royal Bank of Scotland.

All these forms of funding can be topped up with scholarships. This part of the funding mix has become more popular. "We do see an increase in the number of scholarships and bursaries," says Landen. Most schools offer scholarships, typically for up to half of the fees. Some are earmarked for particular candidates, such as women, foreign students and former armed services personnel. Several, including one for full tuition and living costs, are available for students taking the MBA at Nottingham's International Centre for Corporate Social Responsibility.
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Increasingly, scholarships are a competitive weapon between schools. "Don't say you're looking for a 100 per cent scholarship," warns Duke. Schools try to award scholarships only on merit, defined as a combination of academic excellence, work experience, leadership skills and the ability to be an ambassador for the school. Hardship is not generally a criterion, although schools generally help students who run into financial difficulties during their course.

Many schools offer discounts to graduates of their university; some also offer discounts for candidates who accept an offer by a given date. In other cases, you can use a pay-as-you-go basis. Many earn while studying: at London Business School, students last year made £965 a week on average. That should make a decent dent even in London Business School's fees.

WikiLeaks: Saudis running out of oil

WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices

US diplomat convinced by Saudi expert that reserves of world's biggest oil exporter have been overstated by nearly 40%

Source: Guardian
The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

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The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco's 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as "peak oil".

Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.

One cable said: "According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray."

It went on: "In a presentation, Abdallah al-Saif, current Aramco senior vice-president for exploration, reported that Aramco has 716bn barrels of total reserves, of which 51% are recoverable, and that in 20 years Aramco will have 900bn barrels of reserves.

"Al-Husseini disagrees with this analysis, believing Aramco's reserves are overstated by as much as 300bn barrels. In his view once 50% of original proven reserves has been reached … a steady output in decline will ensue and no amount of effort will be able to stop it. He believes that what will result is a plateau in total output that will last approximately 15 years followed by decreasing output."

The US consul then told Washington: "While al-Husseini fundamentally contradicts the Aramco company line, he is no doomsday theorist. His pedigree, experience and outlook demand that his predictions be thoughtfully considered."

Seven months later, the US embassy in Riyadh went further in two more cables. "Our mission now questions how much the Saudis can now substantively influence the crude markets over the long term. Clearly they can drive prices up, but we question whether they any longer have the power to drive prices down for a prolonged period."

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A fourth cable, in October 2009, claimed that escalating electricity demand by Saudi Arabia may further constrain Saudi oil exports. "Demand [for electricity] is expected to grow 10% a year over the next decade as a result of population and economic growth. As a result it will need to double its generation capacity to 68,000MW in 2018," it said.

It also reported major project delays and accidents as "evidence that the Saudi Aramco is having to run harder to stay in place – to replace the decline in existing production." While fears of premature "peak oil" and Saudi production problems had been expressed before, no US official has come close to saying this in public.

In the last two years, other senior energy analysts have backed Husseini. Fatih Birol, chief economist to the International Energy Agency, told the Guardian last year that conventional crude output could plateau in 2020, a development that was "not good news" for a world still heavily dependent on petroleum.

Jeremy Leggett, convenor of the UK Industry Taskforce on Peak Oil and Energy Security, said: "We are asleep at the wheel here: choosing to ignore a threat to the global economy that is quite as bad as the credit crunch, quite possibly worse."

The truth about your global fund investment

Is Your International Fund Invested Where You Think It Is?

Posted by: Ben Steverman on February 8, 2011

Source: Bloomberg Business Week
When it comes to international stock funds, many investors literally don’t know where they are.
That’s the verdict of Sarah Ketterer, portfolio manager and chief executive officer at Causeway Capital Management, based on an analysis of popular international stock indexes. “We don’t think any fund is what it purports to be geographically,” she says.
An index or mutual fund might advertise itself as focused on a particular part of the world — emerging markets, Asia ex-Japan, developed markets, and so on. Yet the geographic breakdown of holdings a mutual fund provides to investors are based on where a company is headquartered, not the countries where a company actually gets its revenue.
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“Where companies are listed has very little to do with where the economic risks [to their businesses] are,” says Ketterer, whose firm manages $12.2 billion in assets. An extreme example: British American Tobacco. Despite its name and its London headquarters, the 48.5-billion-pound ($78 billion) company sold just 17 percent of its product in Western Europe in the first nine months of 2010. Its fastest growth comes from emerging markets in Asia.
Nonetheless, British American Tobacco is a member of 200 stock indexes and nearly all exclude Asia and emerging markets by focusing on the United Kingdom, Europe or developed markets.
Among mutual funds, consider one popular option—funds based on the MSCI EAFE Index, which includes only developed market stocks outside the Americas. Causeway estimates 17 percent of index companies’ sales came from North America, and almost 10 percent from emerging markets. In other words, more than a quarter of the index’s exposure comes from outside its core focus.
“The more multinational companies are, the more confusing it is to investors,” Ketterer says. She expects such geographic distinctions to blur further as companies continue to benefit from strong sales growth in emerging economies like China, India and Brazil, while the economic growth in developed markets in Europe and North America remains slow.
No one is suggesting such international exposure is a bad thing. Many companies in developed markets - and their shareholders — are profiting from emerging-market exposure. It does, however, complicate the tasks of investors and financial planners who want to carefully spread their risks across the globe. Adding to the confusion, there is no standard way that companies report international sales. Some decline to provide any detail at all.
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Standard & Poor’s senior index analyst Howard Silverblatt, a contributor to this blog, does an annual estimate of the overseas exposure of the S&P 500, which includes only U.S. companies. Last year, he found 46.6 percent of the S&P 500’s 2009 sales came from outside the U.S., but those figures only include the half of the index that actually discloses such data.
Geographic analysis by revenue for prominent indexes is hard to find, but such analysis is nonexistent for almost all of the thousands of mutual funds or exchange-traded funds marketed to investors. (Causeway did conduct a similar analysis of its own Causeway Global Value and Causeway International Value funds, finding both developed-market funds had 10.7 percent exposure to emerging market sales.)
Clearing up this confusion will take time, but Ketterer predicts investor demand could force clearer company disclosure and more geographic analysis of fund holdings. “In ten years, that’s how this will be reported,” she says.

Paypal fights off Google and Apple

EBay to Unveil Plan to Help PayPal Repel Google, Apple Threats
Preparing for a day when its PayPal unit is its biggest source of revenue, eBay will lay out a three-year plan for expanding the business
By Douglas MacMillan and Joseph Galante
Source: Bloomberg Business Week
(Bloomberg) -- EBay Inc., preparing for a day when its PayPal online-payment unit is its biggest source of revenue, will lay out a three-year plan tomorrow for expanding the business and warding off threats from Google Inc. and Apple Inc.
At a meeting with analysts, EBay will unveil its strategy for the mobile version of PayPal, the BillMeLater service and its open-platform effort, which lets outside programmers work with its software, the San Jose, California-based company said.
While Chief Executive Officer John Donahoe will discuss plans for the entire company, he'll devote close attention to PayPal -- EBay's fastest-growing business . The payment service is on track to generate more revenue than EBay's e-commerce marketplace in coming years, the company has said. Key to that growth will be fending off threats from technology companies and the three largest credit-card networks, which are all investing in online-payment systems.
"There is a huge opportunity for innovation and share gain in the payment space over the next five years," said Dana Stalder, a former PayPal executive who's now a venture capitalist at Matrix Partners. "PayPal is the best-positioned of any company to seize that opportunity, but it will take a lot of great execution."
The effort is led by Scott Thompson, a former Visa Inc. executive who joined PayPal in 2005. He aims to capitalize on PayPal's head start and avoid the fate of EBay's auction site, which lost its lead in e-commerce to Amazon.com Inc. PayPal declined to make Thompson, 53, available for an interview.

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Smartphone Payments

A growing array of rivals is offering alternative payments -- transactions not done with cash, check or credit cards -- spurred in part by the rise of smartphones.
Apple and Google are both working on enabling payments through so-called near-field communications, a wireless standard that would let users glide through checkout lines by waving their phones, people familiar with the plans said.
Using PayPal on mobile devices requires consumers to download its application. That hurdle may give an edge to Apple, Google and carriers such as Verizon Wireless because they can weave their payment technologies directly into a phone's interface.
"They are going to have to continue to innovate in mobile, and they are somewhat at a disadvantage in that they don't control the mobile platform," said Aaron Kessler , an analyst at ThinkEquity LLC in San Francisco.

'It's All We Do'

PayPal says its advantage is its narrower focus. "PayPal clearly is a leader in payments -- it's all we do," said Anuj Nayar, a spokesman for PayPal, which has its own campus down the road from EBay's headquarters. "There are a lot of new entrants in the payments market. Many of them have one or two of the capabilities that PayPal delivers. Nobody has all of them."
Facebook Inc. , meanwhile, has served as both a boon and a threat to PayPal. People who play games on social-networking sites use the payment service to buy virtual goods, such as a tractor for "FarmVille" or a gun on "Mafia Wars." Those kinds of items now account for more than 33 percent of payment volume at PayPal, according to Deutsche Bank AG.
Facebook, though, has begun taking a 30 percent cut of transactions on its site. It's promoting its own option called Facebook Credits, which works with PayPal as well as other payment services. That may restrict the potential market.

Profit Margins

Another challenge: While PayPal has helped revive growth at EBay, it's come at a cost. The division carries lower profit margins than EBay's marketplace.
The main business has margins of about 40 percent, according to Spencer Wang , an analyst at Credit Suisse Group AG. At PayPal, the figure was 22.1 percent at the end of 2010, though the margin will grow to more than 25 percent over the
next five years, he predicts.

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"The EBay business is structurally far more profitable," said Stalder, who became a venture capitalist after leaving EBay in 2008. "In order to achieve the same cash flow, PayPal has to be dramatically bigger than EBay ."
PayPal also faces competition from startups such as Square Inc. and Zong Inc., along with MasterCard Inc., Visa and American Express Co., which spent almost $3 billion last year to buy Internet-based payment processors.
"PayPal has to figure out how to create loyalty to the PayPal brand," said David Robertson , publisher of the payment-industry trade publication Nilson Report. That may mean offering users rewards to sign up for mobile services, or wowing them with gee-whiz applications.
It also won't be able to rely as much on the EBay site to promote PayPal. Most EBay buyers and sellers already rely on the payment service, so the marketplace is losing its power to find new PayPal customers.
That's adding pressure for PayPal to spread out, said Rich Aberman, co-founder of payment startup WePay Inc.
"PayPal rode on the EBay wave into the mainstream," he said. "PayPal is obviously trying to change that because EBay is not the golden goose it used to be."

Douglas MacMillan is a staff writer for Bloomberg Businessweek in San Francisco. Galante is a reporter for Bloomberg News in San Francisco.

How much money will you need to retire comfortably?

Retirement savings goal is no magic number
By Dave Carpenter
AP Personal Finance Writer
Source: The Inquirer Digital
CHICAGO (AP) - Coming up with "your number" - the amount of money you will need to retire comfortably - is a preoccupation for many.

Some financial services have encouraged the quest, most memorably ING in TV commercials showing baby boomers with bright orange numbers with dollar signs on their heads.

The concept has gained urgency in recent years, especially after two market meltdowns that eroded retirement savings and confidence alike.

But it may actually be counterproductive. Rather than a decades-long, potentially futile effort to reach a huge number, you may be better off setting achievable benchmarks along the way.

That's not to say that setting financial goals for retirement and trying to reach them isn't important.

Many people, after all, are on pace to run low on cash in retirement, which will leave them needing to rely on Social Security checks that average only about $1,100 a month.

About 36 percent of early boomers (currently age 56 to 62) alone are at risk of not having enough money to pay for basic expenditures and health care costs through 20 years of retirement. That's based on an analysis of recent retirement savings, housing equity and other data by the Employee Benefit Research Institute.

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There's a problem, though, with attaching a single, large number to your aspirations. Coming up with a reliable number for your retirement savings goal is tough enough. Reaching it might feel impossible. And that can be deflating.

"Looking at a monster number and thinking 'I'm never going to get there' causes a lot of procrastination," says Anne Arvia, senior vice president of retirement plans for Nationwide Financial. "It can be overwhelming."

If your retirement savings strategy is built around reaching a particular number, you are probably at greater risk of having it derailed.

Cathie Collins, 51, of Littleton, Colo., has been calculating her "magic number" since she was in her 20s. Relying on financial advisers and planning tools, she calculated it at $1 million, and later $1.2 million, in order to maintain the same standard of living in retirement.

She did all the right things financially: living frugally, saving aggressively, investing regularly, fully funding her retirement plans and paying off high-interest credit cards.

With a six-figure income as an information technology consultant, Collins seemed destined to reach or exceed her number. Then a series of life events set her back: divorce, some bad investments, the market crash that wiped out as much 40 percent of her savings and, last year, a layoff.

Instead of being three-quarters of the way to her savings goal, as she said her guidelines suggest, she's only about halfway there.

She still tracks her progress occasionally through some of the many online retirement calculators. Some help you calculate your number, while others chart different paths to retirement security.

Collins is honing in on other things now, such as paying off the mortgage on her condo, maintaining a healthy emergency fund and managing her stock portfolio more closely, guided by a Vanguard financial planner.

"I'm not as obsessed about it as I used to be," she says of her number. "I've already accepted the fact I won't hit it. But I do think it's worth striving for."

Some experts think retirement calculators entail too much guesswork and overestimate the extent of spending in retirement.

They think you're better off focusing on other areas besides a seven-digit savings figure.

One increasingly popular concept advocates setting a savings target that's a multiple of current household income. It's a more manageable way of staying on top of your progress toward retirement security.

Most advisers say you'll need to make anywhere from 70 percent to 85 percent of your pre-retirement income to maintain a similar standard of living in retirement, although it can vary widely depending on lifestyle. The capital-to-income ratio, introduced in 2005 by financial adviser Charles Farrell, holds that you should have about 12 times your income in assets by age 65 in order to produce 80 percent of pre-retirement income.

Under that formula, you should have 5.2 times your income set aside at age 50, meaning someone with a $60,000 salary at that age would need to have $312,000 in savings to be on track.

Lowering spending expectations in retirement makes it easier to keep pace. Having 10 times your income saved by age 65, for example, would enable you to live on 70 percent of pre-retirement income.

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Comparing capital to income is more reliable than a savings target because it's tied to your current spending habits, argues Farrell, of Northstar Investment Advisors in Denver.

"People are generally overoptimistic about what they can do with their personal finances," he says. "Income is used to establish our lifestyle, so I think it's the most honest way of looking into the future and deciding what your needs might be."

Any number is only a rough guideline, of course. Assumptions and projections are subjective and vary from formula to formula.

For example, a similar ratio developed by financial services company TIAA-CREF holds that your savings should be 8½ times your salary by age 65. That same 50-year-old with a $60,000 salary would be on course with just over four times salary, or a little more than $240,000. This asset-salary ratio assumes that Social Security would replace 25 percent of income, versus 20 percent under Farrell's formula.

A simpler approach, advocated among others by Principal Financial, holds that the average investor should focus on saving 11 percent to 15 percent of...read more on The Inquirer Digital

Investing more in high-speed rail will keep U.S. competitive, White House says

By Ashley Halsey III

Washington Post Staff Writer

Tuesday, February 8, 2011; 10:11 PM

Source: The Washington Post

PHILADELPHIA - The Obama administration wants to invest $53 billion in high-speed and intercity rail service in the next six years, expanding a signature transportation initiative it already has targeted with $10.5 billion.

The plan to spend billions more on a vast high-speed-rail network was cast by the administration as vital to keeping the United States competitive with world markets that already use the technology.

"Public infrastructure investment raises private-sector productivity," Vice President Biden said Tuesday, continuing a theme struck by the president in his State of the Union speech last month. "They literally are the veins and arteries of commerce."

Biden and Transportation Secretary Ray LaHood announced the plan Tuesday in Philadelphia's majestic 30th Street Station. Obama's budget for fiscal 2012, which will be sent to Congress next week, includes $8 billion for the plan.

There is bipartisan support for construction of high-speed rail but sharp disagreement on whether it should be funded with tax dollars or through private investment.

The proposal drew immediate criticism from House Transportation Committee Chairman John L. Mica (R-Fla.), who favors construction of high-speed rail largely with private funds.

"This is like giving Bernie Madoff another chance at handling your investment portfolio," Mica said in a statement. "With the first $10.5 billion in administration rail grants, we found that . . . what the administration touted as high-speed rail ended up as embarrassing snail-speed trains to nowhere."

Although Biden spoke in more modest terms, high-speed advocates envision a network of 17,000 miles of rail capable of handling trains traveling at 220 mph. The U.S. High Speed Rail Association has estimated the price tag at $600 billion over the next 20 years, a cost that critics say the nation cannot afford.

The White House push for high-speed rail construction was launched with $8 billion in stimulus act funding. Later LaHood added $2.5 billion to boost the effort in 23 states. California has received the bulk of the awards - about $3 billion total.

Virginia received $45.4 million in the last round of funding to help pay for studies and preliminary engineering to improve service between Richmond and Washington. But more than half that money went for trains that travel much slower than the 150 to 220 mph common in Europe and Japan.

The proposal to allocate $8 billion in the next fiscal year spreads the money across three types of train travel: construction of high-speed corridors, creation of regional systems for trains capable of speeds from 90 to 125 mph and provisions for slower feeder lines into the high-speed network.

Critics have argued that a car-loving nation will not be won over to train travel in sufficient numbers to justify the federal investment. Two recently elected GOP governors, Scott Walker of Wisconsin and John Kasich of Ohio, plan to forgo $1.3 billion in federal high-speed-rail funding and focus instead on highway improvement.

According to the Associated Press, Rep. Eric Cantor (Va.), the second-ranking House Republican, urged the administration to involve the business community in its high-speed-rail plans.

"I'm not in favor of additional monies that we don't have to be spent on those projects and would certainly look for ways to leverage the private sector to get it involved," Cantor said.

In announcing the plan Tuesday, Biden twice mentioned that he took more than 7,900 round trips on Amtrak trains between Washington and his home in Delaware during his years in the Senate. He said transforming rail service to match the high-speed lines proliferating in China and Europe is essential to continued prosperity.

He said the United States "taught the world" about transportation in the 19th and 20th centuries.

"If we don't get a grip, folks, they're going to be teaching us," he said. "They're going to own our kids."

Biden said building rail lines would relieve highway congestion on the East and West coasts, where most Americans live, and put people back to work.

"Right now, nobody makes these [trains] in America," he said. "Our long-term commitment is going to give birth to a new industry."

The American Public Transportation Association endorsed the administration's plan to invest more in high-speed rail.

"Investing in our country's transportation infrastructure is vital for economic growth, competitiveness and quality of life," said William Millar, president of the public transportation association. "In addition, the formation of a high-speed-rail network that connects to public transportation will relieve both highway and aviation congestion."

Mica urged the administration Tuesday to focus its spending on the crowded Northeast rail corridor and not to "squander limited taxpayer dollars on marginal projects."

Last fall Amtrak announced a 30-year plan to invest $117 billion in developing high-speed rail in the Northeast corridor. Amtrak President Joseph Boardman has said the system would reduce the travel time between Washington and New York City from 162 minutes to 96 minutes and the New York-Boston time from 215 minutes to 84.

However, Mica's disdain for Amtrak is as well established as Biden's love for it.

"Amtrak's Soviet-style train system is not the way to provide modern and efficient passenger rail service," Mica said.