Aviation and Airport Development Law : Aviation Lawyer & Attorney : Chevalier Allen & Lichman Law Firm : Airport Development, Environmental Law

With the current emphasis on “renewable energy” and sustainability, along with a healthy dose of federal funding, many companies have been developing plans for wind farms to help move this nation from the grip of over-reliance on petroleum products for its energy needs. While barriers to their construction are not new, with wind turbine companies fending off Endangered Species Act lawsuit (endangered bats running into blades) and other environmental issues, the FAA recently raised an additional issue: obstruction to aviation.

On Wednesday, January 6, 2010, the FAA found that 15 of Gamesa’s proposed 30 wind turbines for Shaeffer Mountain in Somerset County, Pennsylvania, exceed “obstruction standards and/or would have an adverse physical or electromagnetic interference effect” on the airspace above the ridge or nearby airports and flight routes. Two days later, on Friday, January 8, 2010, the FAA ruled that one of the two wind turbines proposed for the Dartmouth, Massachusetts owned land is a hazard to air traffic and must be lowered. 

The FAA may have learned its lesson, since back in April, 2008, it was told to go back to the drawing board with its “Does Not Exceed” determinations for a proposed wind farm above a proposed airport just south of Las Vegas in Ivanpah, Nevada. Clark County v. FAA. There, the court determined that the FAA’s findings flew in the data that the 400 ft towers would penetrate the FAA’s 40:1 slope and that 83 turbines would appear as a “fleet of jumbo jets” to the air traffic controllers.

It may be prudent, then, to review the process established by the FAA for determining if an object will be considered to be an “obstruction.”

Notification

Part 77 of the Federal Aviation Regulations (14 C.F.R., Part 77) establishes standards and notification requirements for objects affecting navigable airspace. This notification serves as the basis for:

• Evaluating the effect of the construction or alteration on operating procedures
• Determining the potential hazardous effect of the proposed construction on air navigation
• Identifying mitigating measures to enhance safe air navigation
• Charting of new objects.

Notification allows the FAA to identify potential aeronautical hazards in advance thus preventing or minimizing the adverse impacts to the safe and efficient use of navigable airspace.

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I.        Introduction

In the grand scheme of things, aviation may not represent a huge source of concern with respect to climate change. But neither should the aviation industry (airports included) ignore the fact that aviation does contribute to climate change not only through the emission of carbon dioxide (CO2) but also through the emission of nitrogen oxides (NOx), aerosols and their precursors (soot and sulfate), and increased cloudiness in the form of persistent linear contrails and induced-cirrus cloudiness. The intent of this series of articles is to examine the effect aviation has on climate change, outline the regulatory and legal framework that is developing, and to suggest avenues for the aviation industry to pursue in the future.  The first challenge is to clear up some misconceptions about aviation and climate change so that we can move forward with accurate and up-to-date information.

II.      Some Facts About Aviation and Climate Change

In Aviation and Climate Change: the Views of Aviation Industry Stakeholders, the aviation industry makes several claims regarding the impact aviation has on climate change. First, the industry claims that “over the past four decades, we have improved aircraft fuel efficiency by over 70 percent, resulting in tremendous savings.” As a result, the industry continues, “given the significance of fuel costs to the economic viability of our industry, our economic and environmental goals converge.” Second, the industry claims that “because of our aggressive pursuit of greater fuel efficiency, greenhouse gas (GHG) emissions from aviation constitute only a very small part of total U.S. GHGs, less than 3 percent.” However, in order to assist the industry in its obligation “to further limit aviation’s greenhouse gas footprint even as aviation grows to meet rising demand for transportation around the world,” those claims of progress need to come under a microscope.

        A.            Contribution of Aviation to Climate Change Remains Subject to Debate

First, how much aviation contributes to climate change is still up to debate. Several governmental and aviation industry organizations have been reporting a “less than 3%” number for quite some time while environmental groups, particularly in Europe, claim that the percentage is anywhere from 5 to 9%. In examining the claims and counterclaims concerning emissions of GHG, one has to be very careful about the language and the metrics used in determining the “impact” any given industry will have on “climate change.” Many reports and studies focus only on CO2, since the amount of CO2 produced both naturally and by humans is overwhelming. However, as just about everyone knows by now, there are other gases and anthropogenic actions that exacerbate climate change. For example, the U.S. EPA recently proposed regulations that would require major emitters of six “greenhouse gases” to report their emissions to the EPA on an annual basis. Those six greenhouse gases are: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), perfluorochemicals (PFCs), and other fluorinated 20 gases (e.g., nitrogen trifluoride and hydrofluorinated ethers (HFEs)). It also should be kept in mind when discussing climate change, especially with respect to aviation, that water vapor is estimate contribute anywhere from 36% to 72% of the greenhouse effect. This is important because the radiative forcing effect of cirrus cloud formation from the aircraft is a significant contributor to the greenhouse effect. As pointed out above, it is generally accepted that for aviation the GHGs of concern are CO2, nitrogen oxides (NOx), aerosols and their precursors (soot and sulfate), and increased cloudiness in the form of persistent linear contrails and induced-cirrus cloudiness.

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On March 4, 2009, Rep. James Oberstar (D. Minn.), the Chairman of the House Transportation and Infrastructure Committee offered several amendments to  H.R. 915, The “FAA Reauthorization Act of 2009."  The following summary of the changes was provided:

Funding of FAA Programs

Revises sections 101, 102, and 104 of H.R. 915 to better align the Federal Aviation Administration’s (“FAA”) Airport Improvement Program (“AIP”) and Facilities & Equipment (“F&E”) funding provisions with the account structure outlined in the FAA’s National Aviation Research Plan. The manager’s amendment moves the Airport Cooperative Research Program and Airports Technology Research funding from the Research, Engineering and Development (“RE&D”) account to the AIP. Similarly, the manager’s amendment shifts funding for the Center for Advanced Aviation System Development from the RE&D account to the F&E account. The manager’s amendment also reduces total funding for RE&D by the same amount as the programs shifted to AIP and F&E.

Authorized Expenditures

Revises section 106(k) to improve safety for medical helicopters by reauthorizing funding for the development and maintenance of approach procedures for heliports that support all-weather, emergency services. This provision was originally included in Title 49 by AIR 21 (P.L. 106-181).

Revises section 106(k) to reauthorize funding for the Alaska aviation safety project with respect to three-dimensional terrain mapping of Alaska’s main aviation corridors for pilot training. This program was originally included in Title 49 by Vision 100 (P.L. 108-176).

Funding for Aviation Programs

Revises section 105 to change the amount initially made available from the Airport and Airway Trust Fund (“Trust Fund”) to support FAA’s budget from 95 percent of the estimated Trust Fund revenues, to 90 percent. This change would provide greater room for error in revenue estimates until the actual level of revenues received for that year is known, and an adjustment is made to reconcile actual amounts deposited to the Trust Fund with actual amounts appropriated from it. Given recent revenue estimates, a 10 percent margin of error is necessary. A year ago, fiscal year (“FY”) 2009 revenues were estimated to be $13.04 billion, but are now estimated to be $11.68 billion, a decrease of approximately 10 percent.

Qualifications-Based Selection

New section 113 requires Qualifications Based Selection (“QBS”) to be used to select planning, architectural and engineering contracts for any airside project funded by Passenger Facility Charges (“PFC”). QBS is an open, competitive procurement process where firms compete on the basis of qualifications, past experience, and the specific expertise they can bring to the project. QBS is currently applicable to planning, architectural, and engineering contracts that utilize AIP funding. Many airports use a mixture of PFC and AIP funds for airside projects.

Solid Waste Recycling Plans

New section 150 requires that airport master plans address the feasibility of solid waste recycling. The Secretary of Transportation may approve a grant for an airport project only if he is satisfied that the airport has a master plan that addresses the feasibility of solid waste recycling at the airport and minimizing the generation of solid waste at the airport. This provision also clarifies that solid waste recycling plans at airports are AIP-eligible by broadening the definition of airport planning.

Personal Net Worth Test for Disadvantage Business Enterprise Programs

New section 137 adjusts the personal net worth (“PNW”) cap for the Disadvantaged Business Enterprise (“DBE”) program as it relates to airport construction projects and airport concessions. To be certified as a DBE (for airport contracting) or an airport concession DBE (“ACDBE”) an individual business owner must be economically disadvantaged. Currently, to be considered economically disadvantaged, a business owner must, among other requirements, have a PNW that does not exceed $750,000, excluding the equity in the individual’s primary residence and the value of their ownership interest in the firm seeking certification. Individuals seeking an ACDBE certification may exclude other assets that the individual can document, which are necessary to obtain financing or a franchise agreement for the initiation or expansion of his or her ACDBE firm (or have in fact been encumbered to support existing financing for the individual's ACDBE business), up to a maximum of $3 million. This provision would adjust the personal net worth cap for inflation for both programs, making an initial adjustment to correct for the impact of inflation since the cap was originally imposed by the Small Business Administration in 1989, and then making annual adjustments thereafter.

Airport Security Program

Revises section 144 of H.R. 915. The manager’s amendment amends 49 U.S.C. 47137 to allow FAA more flexibility to award contracts, cooperative or other agreements in addition to grants, to a consortium composed of public and private persons including an airport sponsor. The provision also reiterates the DOT’s and other agencies’ obligation to cooperate and provide technical expertise as needed to administer the program, while the DOT retains overall program oversight and funding responsibility. The provision specifies that the award designee be a nonprofit consortium with at least ten years of demonstrated experience in testing and evaluating anti-terrorist technologies at airports. The annual authorization for this program is increased from $5 million to $8.5 million. This provision was originally included in Title 49 by AIR 21 (P.L. 106-181) and amended by Vision 100 (P.L. 108-176).

Airport Master Plans

New section 151 requires the Secretary of Transportation (“Secretary”) to encourage airports to consider customer convenience, airport ground access, and access to airport facilities in airport master plans.

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The GAO released its Report to Congressional Committees on the FAA's "Voluntary Airport Low Emissions" (VALE) program on November 10, 2008.  Entitled Aviation and the Environment:  Initial Voluntary Low Emissions Program Projects Reduce Emissions, and FAA Plans to Assess the Program's Overall Performance as Participation Increases, the GAO reports on how the VALE has been implemented and the outcomes attributable to it.

In 2003, Congress established VALE to reduce airport ground emissions at commercial service airports in areas failing to meet or maintain air quality standards.  FAA administers the program and provides funding for it through Airport Improvement Program grants or Passenger Facility Charges.  Participating airports receive credits for the emission reductions achieved through VALE projects.  Airports can then use these credits to offset emissions resulting from development projects to comply with federal Clean Air Act requirements.

The GAO reports that as of September, 2008, only 9 of the 160 airports that were eligible had or were planning to initiate a VALE project.  Those airports are:

• Bush Intercontinental Airport, Houston, TX
• Hobby Airport, Houston, TX
• Detroit Metropolitan Airport, Detroit, MI
• Erie International Airport, Erie, PA
• Greater Rochester International Airport, Rochester, NY
• Albany International Airport, Albany, NY
• Stewart International Airport, Newburgh, NY
• Westchester County Airport, White Plains, NY
• Philadelphia International Airport, Philadelphia, PA

Although FAA expects participation in VALE to increase as more airports become familiar with the program, GAO reported that non-participating airports stated they were aware of the program, but did not want to participate.  One reason for the lack of participation is that some airports have a misperception that VALE projects compete with other projects for AIP funding, thereby limiting the funds an airport could receive for other projects.  VALE projects, however, are funded through discretionary AIP set-aside for noise and emission projects.

This is not to say that VALE is not without success. Houston Hobby Airport and Bush Intercontinental Airport have both taken advantage of the program to obtain emission credits for planned construction projects.  Likewise, Philadelphia International Airport plans to use the program to satsify CAA conformity requirements to offset emissions produced in the constructionof its ongoing capacity enhancement project.

Despite the marked lack of participation, FAA seeks to use VALE as a "new model for government efforts to promote clean fuels and technology."  For this reason, the FAA and the GAO point out that EPA is recommending in current proposed revisions to its General Conformity Regulations that the VALE system for granting emissions credits be expanded to all action subject to General Conformity Regulations.

Related articles and documents:

• US green airport scheme fails to take off, Businessgreen.com, November 11, 2008.
• EPA Proposed Revisions to General Conformity Rules, Aviation and Airport Development Law Blog, March 7, 2008.
• Guidance on Airport Emission Reduction Credits for Early Measures Through Voluntary Airport Low Emission Programs.  EPA, 2004.
• Aviation and the Environment:  Strategic Framework Needed to Address Challenges Posed by Aircraft Emissions, GAO, Feb. 28, 2003.

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Anyone who has recently traveled for business, read the business section of the local newspaper, or watched CNN knows that the airline industry is in dire economic straits.  Pundits typically attribute that weakness to increased fuel prices.  But the reality is that the deterioration began at almost the same time as the passage of the Airline Deregulation Act in 1978 and results from at least two major factors:  (1) predatory competition pitting legacy carriers against startups; and (2) the airlines' flawed business model which depends on "hubbing," an expensive process of concentrating resources in a few locations to aggregate as much demand as possible (versus "point to point" operations, a model used consistently and successfully for the entire period since the advent of deregulation).

The Airline Deregulation Act was Congress' test of the viability of transforming the airline industry, an industry that had, until that time, been considered in the nature of a regulated utility, into a model of the benefits of economic competition.  Specifically, the ADA eliminated Federal control over airline routes and pricing, and prohibited any local or state government from exercising that control.  Its intended purpose was to increase competition thus expanding service and lowering prices to the public.

The fundamental problem with this conversion from utility to free market is that is ignores the fundamental reality that airlines like other transportation industry components have never been able to survive for long without government subsidies.  They are continuously subsidized out of the taxpayers' pockets in at least two ways:  (1) construction and improvement of airports upon which airlines operate are paid for 80-90% by grants from the Federal Aviation Administration ("FAA"), to which development airlines contribute through landing fees and other charges; and (2) in times of economic upheaval such as the aftermath of 9/11, they received direct gifts from the government to keep them afloat.  Until September/October, 2008, when banks began getting Federal government handouts, airlines were among the principal U.S. businesses relying upon such taxpayer largesse.

A debate has now arisen within the airline industry cncerning the wisdom of some form of re-regulatoin.  On the one hand, Robert Crandall, former President of American Airlines, argues, in his article of June 16, 2008, in Aviation Week and Space Technology, that "unfettered competition does not work.  Airlines are more like utilities," and that "a fundamental problem is how the industry prices its product.  The instant perishability of empty seats and the impossibility of quickly reducing fixed costs when demand falters, create a temptation to sell seats too cheaply."  He suggest, among other things, some combination of "modest price regulation," and "capacity controls at congested airports, revised bankruptcy and labor laws, and a more accommodating stance toward industry collaboration."  Id., see also, Aviation Week and Space Technology, October 27, 2008.

On the other hand, those who disagree contend that deregulation should be extended to "completing the move to deregulation in areas as foreign investment [in U.S. airlines] laws, security mandates, bankruptcy reform, and operational restrictions."  Id.

Whichever way it goes in the future, the traveler is being squeezed now.  Aircraft operations are being cut back, services are being eliminated, delays are increasing, baggage incurs additional charges, and, adding insult to injury, travelers are paying "fuel surcharges."  Ironically, however, deregulation has also allowed airlines to consolidate, thus freezing out startups, and raising prices to the public, the opposite of the effect deregulation was supposed to have had.  No one argues that airlines are not an indispensable part of the nation's transportation system.  It is, therefore, clear tha they will have to continue to survice and, hopefully, to thrive.  However, the question raised by Bob Crandall, i.e., whether a heavily subsidized airline industry can survive in the guise of free market enterprises, still hangs in the air.

Related Articles:

• Remarks of Michael E. Levine, "Airline Survival in a Tough World."  Speech before the The International Aviation Club, July 29, 2008.
• "The 'Tragedy of the Commons' and Airport Congestion Management," Steven M. Taber.  Blog post, September 22, 2008.
• "The Threat of Latter-Day 'Progressives' to an Authentically Liberal Economic Policy," Alfred E. Kahn.  Working Paper 08-03, January, 2008, Reg-Markets Center.

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