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Correct. Here's a clip with a nice visual aid for what he's talking about: https://youtu.be/hpDHwfXbpfg?t=1m18s

Perhaps. That's not what's said in the first two paragraphs of the article though.

"That superfast train, known as the hyperloop"

Edit: Ah, perhaps the article structure is just confusing to me. It's hard to map which "Tunnel Plan" they mean in the article.

That would be awesome, especially if you can keep the engine running for climate control, etc.