On Wednesday, July 29, 2009, the bipartisan leadership of both the Committee on Transportation & Infrastructure and the Subcommittee on Aviation introduced H.R. 3371, the "Aviation Safety Bill" designed to "enhance airline safety by setting new training and service standards for commercial pilots."  This bill came primarily as a response to the Senate Commerce Committee’s passage

 The Waxman-Markey Bill (also known as the American Clean Energy and Security Act) hearings ended with a bang, featuring Former Vice President and Nobel Laureate Al Gore, former Senator John Warner and former Speaker of the House Newt Gingrich. The testimony they gave was no surprise, but it underlined the deep divisions that exist, at least at the political level, and the uphill battle that this Bill faces.

Gore’s Testimony

Former Vice President Gore was first in the witness chair. He gave his standard (and very effective) stump speech about climate change: the country is at risk on three fronts: economy, national security and climate. He likened the Waxman-Markey bill to a civil rights bill: “the most important of our lives. It is a moral imperative.” He stated that it is an environmental Marshall Plan, which is what he called for (and outlined) in his book “Earth in the Balance.” Gore then started talking about “tipping points,” his belief that the levels of CO2 in the air and other factors that might tip the balance to a point that it is irreparable. He ended his statement with “the USA is the world’s leader. Once we find the courage to take on this issue the world will also act. We need to act.” 

The Climate Change skeptics on the Committee sought to discredit Gore, but were largely unsuccessful. First, Rep. Fred Upton (R.-Mich.) tried to paint Gore as being anti-nuclear. Gore responded that he is not anti-nuclear, it is just his belief that the problems associated with nuclear energy, i.e., waste, accidents, size, fuel sources, weapons issues, are not easily addressed. Rep. Steve Scalise (R.-La.) took a shot at Gore accusing him of conspiring with Ken Lay of Enron for setting up insider trading deals that are contained in the cap-and-trade portion of the Bill. Gore responded with the respect that such a comment deserves: “there are people that still think the moon landing was staged in a Hollywood studio.” Rep. Marsha Blackburn (R.-Tenn.) also attempted an ad hominem attack, asking whether Gore personally profited “from this push towards a cap-and-trade system?” She specifically referred to Gore’s presence on the Board of the firm Kliner Perkins. Gore responded incredulously “are you serious? Do you think I have devoted the past 30 years of my life to this cause just so I could benefit from a bill that is up for debate right now?” In all, the attacks on Gore did not move the skeptic’s agenda forward.

Warner’s Testimony

Former Sen. Warner, a Republican from Virginia, who was the co-author of last year’s Warner-Lieberman Bill which covered much of the same ground as this bill, echoed Gore.  Warner stated that “energy independence, global climate change and national security are very interwoven.” Warner recognized that there will be costs to industry and to the people, but that “if we keep on with business as usual, we will reach a point where the worst effects are inevitable.”

Gingrich’s Testimony

By contrast, former Speaker of House Newt Gingrich’s testimony focused on his proposal that instead of clean energy, the U.S. ought to expand off-shore drilling, oil shale, oil refineries, “green” coal, and nuclear energy to resolve its energy security issues. Gingrich heightened the rhetoric by calling the EPA economic analysis “intellectually dishonest” in not presenting both sides of the story. This tactic, reminiscent of the debate over evolution, seeks to paint one side as presenting something that is not certain and claiming that that side is not releasing all of the facts. 

The Democrats ripped into Gingrich. Chairman Henry Waxman (D.-Calif.) excoriated Gingrich for using scare tactics and talking in circles, ending by asking “if you are scared to work with us, what are doing here?” Likewise, Rep. Jay Inslee (D.-Wash.) asked Gingrich “you were asked in 2007 if you supported a cap on carbon. You responded ‘frankly, it is something I would strongly support.’ What happened?” Indeed, Gingrich appeared in ads for Gore’s “We” campaign promoting the reduction of greenhouse gas emissions. Gingrich did not have a reply.

Industry and Regulator Testimony

In the afternoon, various industry officials paraded before the Committee to ask for specific changes to the Bill that would benefit their industry and regulators stating that those changes should not be made. For example, Dr.  Dan Sperling from the University of California at Davis stated that the California Air Resources Board voted for a Low Carbon Fuel Standard, and the U.S. should follow California’s lead. On the other hand, Charles Drevna, President of the National Petrochemical and Refiners Association testified that Low Carbon Fuel Standard is redundant, costly and punitive. There were a few good points made, though. Ian Bowles, from the Massachusetts Office of Energy and Environmental Affairs, updated the Committee on Massachusetts’ experience with 100% auctions, concluding that auctions work and they work “brilliantly.”

Click on "Continue Reading" for a Witness List with links to their prepared testimony as well as links to video of the session.

Continue Reading Day Four of Waxman-Markey Bill Hearings: Al Gore, John Warner and Newt Gingrich Steal the Show

On Day Three of the Waxman-Markey Bill (also known as the American Clean Energy and Security Act) hearings, perhaps the best place to begin is with Rep. Edward Markey’s (D-Mass) closing remarks, where he asked the panelists "do you think we can construct a cap-and-trade system?"  All of the panelists replied in the affirmative.  This session, without the Administration headliners of yesterday and the Pop culture icons that are scheduled for tomorrow (Al Gore and Newt Gingrich), was noticeably less on point and more meandering.  There were, however, several central themes:  cap-and-trade, Carbon Capture and Storage, and renewable energy.

Cap-and-trade

Although this topic was discussed extensively yesterday, the first panel consisted of representatives of various utility groups and consumer groups.  The electric utilities all seemed to want the same thing:  free allowances instead of having to pay for them at auctions.  They claim that this will allow the utilities to keep their prices down.  There is no surprise there.  The only interesting quote from a Congressman came, once from Rep. Joe Barton (R. Texas), who told the witnesses that "hybrid cars never pay off and American won’t drive them unless forced by the government, backed by the Army."  How dead was it in the Committee room?  One report indicated that "the Chairman is reading a paper and only about 3 Reps are paying attention to these guys begging for handouts."

Carbon Capture and Storage/Clean Coal

During the hearings there has been talk about "Carbon Capture and Storage."  Carbon capture and storage (CCS) is an approach to mitigating the contribution of fossil fuel emissions to global warming, based on capturing carbon dioxide (CO2) from large point sources such as fossil fuel power plants and storing it away from the atmosphere.  The utilities and the coal industry believe that CCS is the way to go because it will allow them to go on using coal without producing CO2.  However, the technology is not there yet, and there is a fear that the development of CCS would draw needed dollars away from the development of other sources of energy.  Interestingly, David Hawkins of the Natural Resources Defense Council stated that CCS can happen if it has adequate policy support.

Renewable Energy

On the other hand you have the advocates for "renewable energy."  Although most people think of solar and wind power when they think of renewable energy, there are other sources.  Geothermal energy is one such source.  Dan Reicher of Google (yes, that Google) testified that "engineered geothermal energy potential in Texas could provide 100% of Texas’ electricity needs."  Supporters of renewable energy also came from unlikely sources, Jim Robo, President and COO of Florida Power & Light told the Committee that "we’ve barely begun to tap renewable energy . . . Unchecked climate change will cost us tens of billions of dollars."  This thinking leads to the Waxman-Markey Bill’s call for a goal to be set that a certain percentage of energy be from renewable sources.  This has also led to various Representatives to call for the definition of renewable energy to include nuclear energy, biomass, and "clean coal."

In the end, there was a chorus among the last panel, calling for a strong legislation to deal with climate change and energy.   One can hope that the last day of the hearings, with some heavy hitters taking the witness chair, the questioning will be a little more interesting.

Click on "continue reading" for a complete Witness List with links to the witnesses written testimony and links to the video of the Hearing.Continue Reading Day Three of Waxman-Markey Bill Hearings: No Headliners, Just Lots of Talk

Over two years ago, on April 2, 2007, the Supreme Court in Massachusetts v. EPA, 549 U.S. 497 (2007), directed the EPA Administrator to determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision.  Finally, after two years and much hand-wringing, EPA Administrator Lisa Jackson issued her proposed finding that carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride may endanger public health or welfare.

In actuality, the EPA proposed two findings:  (1) an endangerment finding, that the six GHG endanger public health and welfare; and (2) a “cause and contribute finding” that the combined emissions of carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons from new motor vehicles and motor vehicle engines contribute to the atmospheric concentrations of these key greenhouse gases and hence add to the threat of climate change.

EPA characterizes its proposed Endangerment Finding as follows:

This is not a close case in which the magnitude of the harm is small and the probability great, or the magnitude large and the probability small. In both magnitude and probability, climate change is an enormous problem. The greenhouse gases that are responsible for it endanger public health and welfare within the meaning of the Clean Air Act.

The EPA, however, was careful to walk a fine line between complying with the dictates of Massachusetts and actually regulating GHG.  While this proposed rule does not actually regulate GHG,  it does propose defining greenhouse gases as “air pollutants” under the Clean Air Act. EPA proposes defining the six GHG as a single pollutant, rather the defining them individually – similar to the approach the EPA took with ozone years ago. EPA explained its decision as follows:

It is the Administrator’s judgment that this collective approach for the contribution test is most consistent with the treatment of greenhouse gases by those studying climate change science and policy, where it has become common practice to evaluate greenhouse gases on a collective CO2-equivalent basis

Although the EPA usually issues emission control standards concurrently with an endangerment finding, in this case, the EPA indicated that the emission standards would be issued “several months from now.”   This bifurcation of the normal process has been taken by observers to mean that these rules are meant to goad the Congress into action, rather than a serious proposal that EPA regulate GHG.  Indeed, the EPA’s Press Release on the Endangerment finding specifically stated that “[n]otwithstanding this required regulatory process, both President Obama and Administrator Jackson have repeatedly indicated their preference for comprehensive legislation to address this issue and create the framework for a clean energy economy.”

And Congressional leadership seems ready to oblige.  Rep. Edward Markey (D.Mass.), Chair of the Energy and Environment Subcommittee, had this to say about the EPA’s Endangerment Ruling:

This decision is a game-changer. It is now no longer a choice between doing a bill or doing nothing. It is now a choice between regulation and legislation. EPA will have to act if Congress does not act.

Markey and Rep. Henry Waxman (D-Calif.) have introduced the American Clean Energy and Security Act of 2009 (ACES) to set up a system for reducing emissions from all sources and creating a financial incentive for companies to stay within emission limits.   See, “U.S. House Energy and Commerce Committee Releases Draft Climate Change Act,” posted April 2, 2009.  Waxman wants to pass the bill from his Energy and Commerce Committee by the end of May, but its fate is uncertain in the Senate.

Aircraft and other aviation sources seem to have received a pass with respect to these regulations:

EPA has received a petition under the Act to consider the regulation of 64 aircraft emissions (water vapor and NOx) that lead to formation of contrails (in addition to aircraft greenhouse gas emissions), and EPA plans to evaluate this issue further. At this time, the Administrator is not proposing to include aircraft-related contrails or emissions that are not greenhouse gases within the definition of air pollution for purposes of section 202(a).

This does not mean, however, that once the emission control standards are promulgated (if they are promulgated), aviation sources will not also be regulated.  Likewise, the Waxman-Markey bill may affect aviation sources as well.

A 60-day comment period will follow publication of the proposed rule in Federal Register, which has not yet occurred.  There will be public hearings in Arlington, Virginia, and Seattle, Washington in May, 2009.   Click on Continue Reading at the bottom of this post for details about written comments and public hearings.

Previous posts on this subject:

Continue Reading EPA Finally Issues Endangerment Finding for Six Greenhouse Gases, Including Carbon Dioxide

On March 10, 2009, the U.S. Environmental Protection Agency issued a news release proposing the first comprehensive national system for reporting emissions of carbon dioxide and other greenhouse gases produced by major sources in the United States.  Although the EPA has yet determine whether greenhouse gases, such carbon dioxide, are "pollutants" under the Clean Air Act, the EPA has taken this step to gather "comprehensive and accurate data about the production of greenhouse gases."

The EPA stated that the new reporting requirements would apply to suppliers of fossil fuel and industrial chemicals, manufacturers of motor vehicles and engines, as well as large direct emitters of greenhouse gases with emissions equal to or greater than a threshold of 25,000 metric tons per year.  The EPA estimates that it will affect approximately 13,00 facilities, which account for about 85% to 90% of greenhouse gases emitted in the United States.  For a listing of the various industries that EPA believes will be affected, see the end of this post.

In order to differentiate it from the mandatory greenhouse gas reporting programs developed by states and regional programs, the EPA will require automobile, truck and engine manufacturers to report emissions from the engines they produce.  The first annual report would be submitted to EPA in 2011 for the calendar year 2010, except for vehicle and engine manufacturers, which would begin reporting for model year 2011.

The proposed rule will be open for public comment for 60 after publication in the Federal Register, which has not yet occurred.  Two public hearings will be held during the comment period.

The Proposed Rule:

Information regarding the public hearing:

Other Information regarding the Proposed Rule:

Continue Reading EPA Proposes National Reporting Rules for Emissions of Greenhouse Gases

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.Continue Reading Several Amendments Made to H.R. 915, FAA Reauthorization Act of 2009

The U.S. House Committee on Transportation and Infrastructure has proposed H.R. 915, the FAA Reauthorization Act of 2009.  Since funding authorization for aviation programs and authorization for taxes and fees that provide revenue for the FAA expired at the end of fiscal year 2007 and revenue collections and FAA programs have been extended several times (until March 31, 2009), this bill is a priority item for the FAA. What follows is a summary of the provisions of the Reauthorization Bill.

Funding & Financing

  • Taxes on aviation users will be increased – Passenger flight segment tax increased to $3.60; International departure and arrival taxes increased to $16.10; Alaska Hawaii facilities tax increased to $8.00.
  • Provides historic funding levels for the FAA’s programs between 2009 and 2012, including $16.2 billion for AIP; $13.4 billion for Facilities and Equipment; $38.9 billion for operations; and $1.35 billion for Research, Engineering and Development.

Airports

  • Makes several modifications to the current AIP distribution formula that provide significant increases in AIP funding for smaller airports, which are particularly reliant on AIP for capital financing, as well as more AIP discretionary funding.
  • Increases Passenger Facility Charge from $4.50 to $7.00.  This provision was strongly supported by Jim Elwood, representing the American Association of Airport Executives.

ATC Modernization and NextGen

  • Provides $13.4 billion for the FAA’s Facilities and Equipment account.
  • Increases the authority and visibility of the Joint Planning and Development Office.
  • Requires the JPDO to develop a work plan that details, on a year-by-year basis, specific NextGen-related deliverables and milestones.
  • FAA wants to emphasize "infrastructure" improvements at the nations’ airports, which includes a full roll-out of NextGen.

Safety

  • Includes several safety provisions, such as authorizing additional funds for runway incursion reduction programs and the acquisition and installation of runway status lights.
  • Increases the number of aviation safety inspectors and requires safety inspections of foreign repair stations at least twice a year.
  • Directs FAA to commence a rulemaking to ensure that covered maintenance work on air carrier aircraft is performed by part 145 repair stations or part 121 air carriers.
  • Creates an independent Aviation Safety Whistleblower Investigation Office within the FAA charged with receiving safety complaints and information submitted by both FAA employees and employees of certificated entities.
  • Directs FAA to modify its “customer service initiative” to remove air carriers or other entities regulated by the FAA as “customers.”
  • Adds a two-year “post-service” cooling off period for FAA inspectors and requires principal maintenance inspectors to rotate between airline oversight offices every five years.

Small Communities

  • Increases the total amount authorized for Essential Air Services each year from $127 million to $200 million.
  • Requires 50% of over-flight fees collected in excess of $50 million be dedicated to EAS.
  • Authorizes the Secretary to enter into long-term EAS contracts that would provide more stability for participating air carriers.
  • Reduces local share of AIP projects from 10% to 5% for economically depressed communities.
  • Includes several provisions to mitigate the effects of increases in aviation fuel costs by increasing the existing $200 per passenger subsidy cap.
  • Extends the Small Community Air Service Development Program through fiscal year 2011, at the current authorized funding level of $35 million per year.

Consumer Protections

  • Includes several provisions to ensure passenger needs are met including a mandate that air carriers and airports submit emergency contingency plans and detail in their plans how they allow passengers to deplane following excessive delays.
  • DOT is required to publicize and maintain a hotline for consumer complaints, establish an Advisory Committee for Aviation Consumer Protection, expand consumer complaints investigated, and require air carriers to report diverted and canceled flight information monthly.
  • DOT Inspector General is asked to report on the causes of air carrier flight delays and cancellations.

Environmental Provisions

  • Includes several provisions related to the environment, noise mitigation and land use initiatives, including:
    • An environmental mitigation pilot program;
    • The phasing out of noisy Stage II aircraft;
    • An aircraft departure queue management pilot program;
    • Broadened AIP eligibility to include several energy saving terminal projects; and
    • Requirements for the FAA to build sustainable air traffic control facilities.
  • Allows airport operators to reinvest the proceeds from the sale of land that an airport acquired for a noise compatibility purpose, but no longer needs for that purpose, giving priority, in descending order to:
    • Reinvestment in another noise compatibility project;
    • Environmentally-related project
    • Another otherwise-eligible AIP project;
    • Transfer to another public airport for a noise compatibility project; or
    • Payment to the Trust Fund.
  • Provides authorization for the Continuous Lower Energy, Emissions and Noise (“CLEEN”) Engine and Airframe Technology partnership to develop, mature and certify CLEEN engine and airframe technology for aircraft over the next 10 years.

Labor

  • Modifies the dispute resolution process for proposed changes to the FAA personnel management system, and replaces it with a new dispute resolution process.
  • Applies the new dispute resolution process to the ongoing dispute between NATCA and the FAA. That is the changes implemented by the FAA on and after July 10, 2005, would be null and void and the parties will be governed by their last mutual agreement.
  • Amends the Railway Labor Act to clarify that employees of an “express carrier” shall only be covered by the RLA if they are employed in a position that is eligible for certification under FAA’s rules and they are actually performing that type of work for the express carrier.
  • Requires an assessment of training programs for controllers and air traffic technicians.
  • Requires that FAA include employee unions as stakeholders in the development and planning for NextGen.
  • Requires the establishment of a Task Force on Air Traffic Control Facility Conditions to determine whether employees are exposed to dangerous environmental conditions in their work place.
  • Requires the Secretary to establish within the FAA a working group to develop criteria and make recommendations for the realignment and consolidation of services and facilities.

Aviation Insurance

  • Extends requirement until September 30, 2012, that the FAA provide U.S. airlines’ aviation insurance from the first dollar of loss at capped premium rates, after which the requirement becomes discretionary until September 30, 2019.
  • After December 31, 2019, such insurance must be provided instead by airline industry-sponsored risk-sharing arrangement approved by the Secretary.

Next Article: Summary of Comments regarding Safety Provisions.Continue Reading U.S. House Transportation & Infrastructure Committee Holds Hearings on FAA Reauthorization Bill

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