Senate Holds Hearing on AlternativeFuels

DATE:            July 28, 2011

GA MEMO:    2011-103

 

This morning the Senate Committee on Commerce, Science and Transportation’s Subcommittee on Aviation Operations, Safety and Security held a hearing entitled, “Aviation Fuels: Needs, Challenges and Alternatives.”

 

Opening Statements:

Aviation Subcommittee Chairwoman Maria Cantwell (D-WA) started the hearing by commenting on the FAA shutdown.  She said that the FAA extension is being held hostage, and it is not fair to FAA workers and the traveling public, because revenue is not being collected.  Regarding the hearing, Chairwoman Cantwell said that there is a real opportunity to help aviation by creating alternative fuels that would reduce aviation costs and emissions.  She said all of the downsides of Jet A fuel will only get worse in the future as demand for aviation increases.

Aviation Subcommittee Ranking Member John Thune (R-SD) began his remarks by talking about the instability of pricing in the jet fuel market.  Ranking Member Thune explained the importance of alternative and new fuel sources for aviation as it will not only help spur private sector growth and lower costs, but it will also help the Department of Defense. 

 

Witnesses:
Panel I:
  • Dr. Lourdes Maurice, Executive Director for Environment and Energy, Federal Aviation Administration
  • Mr. Terry Yonkers, Assistant Secretary of the Air Force for Installations, Environment, and Logistics, SAF/IE
  • Mr. Bill Glover, Vice President of Environment and Aviation Policy, Boeing Commercial Airplanes, The Boeing Company
  • Mr. Tom Todaro, Chief Executive Officer, Alt Air Inc.
  • Ms. Sharon Pinkerton, Senior Vice President of Legislative and Regulatory Policy, Air Transport Association
Panel II:
  • Ms. Judy Canales, Administrator for Rural Business and Cooperative Programs, U.S. Department of Agriculture
  • Mr. Richard Altman, Executive Director, Commercial Aviation Alternative Fuels Initiative (CAAFI)
  • Mr. John Plaza, President and Chief Executive Officer, Imperium Renewables

 

Questions:
Panel I:

Chairwoman Cantwell asked Mr. Yonkers about the challenges of having alternative fuels by 2016.  Mr. Yonkers said there are still some milestones that need to be reached.  He said that he hopes to have certification for three different options by 2015.

Chairwoman Cantwell followed up by asking Mr. Yonkers and Ms. Pinkerton about problems with synthetic fuels.  Mr. Yonkers said a drawback with synthetic fuels has to do with where the fuels originate from.  Some synthetic fuels derive from coal, but synthetics from bio products are much greener.  Ms. Pinkerton said that alternative fuels are critical to the airline’s meeting their commitments to ICAO and are a significant part of NextGen.

Ranking Member Thune stated that renewable fuels are expensive for research and development, and he asked the panelists if multi-year contracts for this type of research is helpful for development.  Mr. Todaro said it would be helpful but that his company would be better served by being able to price according to market conditions.

Senator Frank Lautenberg (D-NJ) asked Dr. Maurice what impact the FAA shutdown would have on FAA operations and projects.  Dr. Maurice said that the shutdown will certainly have an impact on NextGen and the research FAA does on alternative fuels.

Senator Lautenberg next directed his comments and questions directly at the airlines by stating that the airlines have been “creative” in passing costs down to passengers to the tune of 20% of ticket prices.  The Senator further explained that since there are currently no taxes being collected then “why aren’t savings being passed on to consumers?”  Ms. Pinkerton told the Senator that the airlines share his frustration with the FAA shutdown.  She added that the airlines “urge Congress to get together, meet and resolve their differences.” Ms. Pinkerton said that the airline industry has had to shed 150,000 jobs due to revenue losses and that they have not been able to cover the costs of flying in a sustained way.  She said that the airlines need to be able to reinvest in jobs, alternative fuels and buying planes and that those investments are not possible in the current climate.  Some carriers made individual decisions to leave the ticket prices the same, but prices are the same as they were last week, explained Ms. Pinkerton.

Senator Lautenberg added his belief that consumer should know very directly what the extra charges are going to be.  He said, “I think we should take it a little bit easier on the consumer.”

Senator Amy Klobuchar (D-MN) said that Delta is cutting service in Minnesota because of jet fuel costs.  She asked Ms. Pinkerton about commodity speculation.  Ms. Pinkerton said they supported the language in the Dodd/Frank Act that would allow the CFTC to regulate speculation, but are frustrated that this is taking so long.

Panel II:

Chairwoman Cantwell asked about the variety of feed stock that could be used in the creation of alternative jet fuels. Each panelist explained the different types of plants and other natural products they are researching for alternative jet fuels. The remainder of the questions for this panel centered on the viability of sources for alternative fuels.