Airlines Fretting Over New Fuel Laws

With Congress about to take up climate-change legislation, some carriers worry that they won't be rewarded as much as other industries for their energy-conservation measures.
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CHARLOTTE, N.C. -- Congress is preparing to take up climate-change legislation, and the airline industry is wary.

It's not that airlines, which will spend an estimated $54 billion on jet fuel in 2008 and are being rocked by higher fuel costs, don't want to conserve energy and reduce emissions. Rather, because they have been working for years to cut fuel consumption, now the biggest cost item for many, they won't be rewarded for their efforts as much as Johnny-come-latelies will.

Additionally, the industry fears the legislation will siphon off money that could go modernize fleets, which could result in reduced fuel use, due to the necessity to purchase emissions permits.

"We've been driven to be fuel efficient for the past 30 years," says Nancy Young, vice president for the environment of the Air Transport Association, the industry's principal trade association. "But under the legislation, a company that switches from coal to natural gas right now is able to generate credits for that, while we've already gotten all of the low-hanging fruit and don't have any alternative to jet fuel."

Most carriers have aggressive fuel-savings programs with the replacement of older aircraft as a centerpiece.

Northwest

(NWA)

, for example, has spent about $6 billion on new aircraft since 2000, becoming 25% more fuel efficient and reducing carbon dioxide emissions by the same amount.

"It's a big number," said Tim McGraw, the carrier's director of corporate environmental programs. "It shows that our new airplanes are far more efficient. Since 2000, we've gone from 22 million metric tons of emissions to 15.5 million metric tons."

While a variety of bills are making their way through Congress, a Senate bill sponsored by Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.) is furthest along. It calls for capping carbon dioxide emissions from power plants, transportation and manufacturing sources in order to reduce greenhouse gases 70% by 2050, through a cap-and-trade plan.

With the bill expected to come up for Senate debate in June, the ATA is preparing for a hearing on airline emissions and the environment Tuesday, before the House Aviation Subcommittee.

The legislation is aimed primarily at the energy industry, not surprisingly since power plants produce about 38% of the country's carbon emissions, while automobiles account for about 25% and aviation another 2%.

Were it to take effect as contemplated, in 2012, the bill would set greenhouse gas emission caps based on energy use in 2005, and would sell emissions permits allowing continued energy use at those levels. Proceeds from the sales would fund various causes, none of which pertain to commercial aviation. Additionally, energy companies could buy and sell permits generated by users who reduce consumption.

"With all the early work we've done to reduce carbon dioxide emissions, we would like to get credit for that," says McGraw. "We'd like to see the baseline set fairly so that folks who invested early don't get penalized."

Among Northwest's improvements, the company has replaced 22 aging DC10s with A330s, which are 35% more fuel efficient. In its narrowbody fleet, it replaced Boeing 727s with 73 Airbus A320s and 57 A319s, which are 30% more fuel efficient. It has also ordered 72 new 76-seat jets and has 18 Boeing 787s on order, with options for 50 more.

"Compare the 76-seat regional jets that are going in as DC9 replacements," McGraw said. "They are 50% more fuel efficient than the DC9s, yet they are probably less than half as fuel efficient as the 787s, which have the newest technology and have much lighter components."

It is worth noting that extremely full planes, now customary in the airline business, promote fuel savings. Today average loads, which used to be around 65%, are close to 80%. "That's one of the ways to be efficient, to get the right plane in the right market, although maybe the consumer doesn't appreciate it as much as we do," McGraw says.

Beyond buying new airplanes, most carriers are also adding winglets, using ground power units rather than jet engines to power aircraft at the gate, and using single engine taxis when possible. Winglets are extensions to plane wings that are meant to increase efficiency.

At Northwest, winglets are being installed on 10 Boeing 757s, at a cost of about $654,000 a set, while the switch to ground power units is producing an annual savings of about 3.5 million gallons of fuel, or 36,000 tons of carbon emission. Northwest has also bought a half dozen high-speed tractors, costing about $400,000 each, to substitute for jet engine power at key airports.

Beyond the obvious steps, carriers are being innovative, often due to suggestions from front-line employees.

U.S. Airways

(LCC)

, for example, will replace paper manuals carried in the cockpit with electronic flight bags and logbooks, saving about 100 pounds of weight on every flight. Already, U.S. Airways says it saves 5.2 million gallons of fuel annually due to conservation measures.

Meanwhile, since 2003,

American

(AMR)

has increased its flying by about 22%, yet its greenhouse gas emissions are virtually unchanged, a sign of vastly increased fuel efficiency. The carrier plans another 30% increase in efficiency by 2020. It now publicly discloses its greenhouse gas figures.

At

Delta

(DAL) - Get Report

, conservation initiatives, including single-engine taxi, reduced aircraft weights and improved flight routings, saved more than 25 million gallons of fuel in 2006 alone.

United's

(UAUA)

ongoing conservation efforts have meant a 34% drop in fuel use per passenger mile since 1990.