slide1 l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Aviation – Current Energy Challenges: A View from the Airline Industry on Energy & Environment AIAA Inside Aerospace Con PowerPoint Presentation
Download Presentation
Aviation – Current Energy Challenges: A View from the Airline Industry on Energy & Environment AIAA Inside Aerospace Con

Loading in 2 Seconds...

play fullscreen
1 / 19

Aviation – Current Energy Challenges: A View from the Airline Industry on Energy & Environment AIAA Inside Aerospace Con - PowerPoint PPT Presentation


  • 510 Views
  • Uploaded on

Aviation – Current Energy Challenges: A View from the Airline Industry on Energy & Environment AIAA Inside Aerospace Conference – May 11, 2010 Nancy N. Young Vice President, Environmental Affairs Air Transport Association of America, Inc. The Challenges

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Aviation – Current Energy Challenges: A View from the Airline Industry on Energy & Environment AIAA Inside Aerospace Con' - medwin


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1
Aviation – Current Energy Challenges:

A View from the Airline Industry on Energy & Environment

AIAA Inside Aerospace Conference – May 11, 2010

Nancy N. Young

Vice President, Environmental Affairs

Air Transport Association of America, Inc.

slide2
The Challenges

Jet fuel costs, supply and price volatility

Climate change pressures and policies

Airline Initiatives to Meet the Challenges

The Need for Complementary Government Policies That “Do No Harm”

Overview

Air Transport Association of America, Inc.

challenge jet fuel price crack spreads fluctuating wildly
Challenge: Jet Fuel Price, Crack Spreads, Fluctuating Wildly

“Passenger airlines have probably been hurt more significantly by high energy prices than any other sector… First, fuel represented a major operating expense for airlines… Second, the cost of jet fuel is a function not only of oil prices, but also of the added cost (known as the ‘crack spread’) to refine oil into aviation kerosene. That added cost has surged from historical levels of $5-$10 per barrel to around $30 recently.”“S&P Looks At How Two Airlines Try To Offset Ever-Higher Fuel Costs,” Standard & Poor’s (July 3, 2008)

Average Price per Barrel

Air Transport Association of America, Inc.

Source: Energy Information Administration

3

slide4
Investors Have Increased Volatility of Crude Oil MarketsComposite Crude Oil Volume* Set New Record of 2,028,736 Contracts on 12/9/09

Oil Traded Daily on Exchanges (Million Barrels)*

* NYMEX WTI + ICE WTI + Brent

Sources: Citi Futures Perspective and IEA, from New York Mercantile Exchange (NYMEX) and London IntercontinentalExchange® (ICE)

Air Transport Association of America, Inc.

4

slide5
In 2008, U.S. Passenger and All-Cargo Airlines Spent $16B More on Fuel Than in 2007 and $42B More Than in 2003

Gallons

Note: Value in parentheses below year is average price paid per gallon excluding taxes, into-plane fees, pipeline tariffs and hedging costs

Sources: ATA, Energy Information Administration, Department of Transportation

Air Transport Association of America, Inc.

5

slide6
Perception

Aviation is a major climate change contributor

Reality

Aviation is a relatively small contributor

Domestic US commercial aviation = 2% GHGs (source: EPA)

Worldwide aviation = 2% man-made CO2 (source: IPCC)

The airlines and industry are working on further reductions

Challenges/Concerns

Aviation demand is projected to grow and, therefore, so are aviation emissions …

Regulatory drive for emissions reductions

Challenge: Climate Change Pressures & Policy

Air Transport Association of America, Inc.

slide7
Fuel Burn Has a Direct Relationship to Carbon Emissions and Affects Other GHGs

ATA Climate and Energy Policy Elements

Continually enhance fuel efficiency

Accelerate development and deployment of alternative aviation fuels

Complementary regulatory framework

For aviation and climate change, the “global sectoral approach”

Other Energy Policy Elements

Reform energy commodities markets

Expand domestic supply (alternative fuels + others)

ATA Energy & Climate Policies Are Integrated

Air Transport Association of America, Inc.

slide8
Airlines’ Excellent Fuel Efficiency Record

US airlines improved fuel efficiency ~110% between 1978 and 2008*

2.7 billion metric tons of CO2 savings = taking ~19.5 million cars off the road each of those years*

From 2000 to 2008

Reduced absolute fuel burn and emissions ~ 5.5%*

Increased passengers and cargo 17%*

To Continue to Improve, Must Be Able to Invest

Fuel Efficiency = Emissions Efficiency

*Fuel/savings/traffic source: U.S. DOT Form 41; automobile equivalent calculations from

www.epa.gov/cleanenergy/energy-resources/calculator.html

Air Transport Association of America, Inc.

slide9
Technology

Invest in newer aircraft

Invest in fleet enhancements (e.g., winglets)

R&D for breakthroughs in engines and airframes

Operations

Weight reduction; maintenance (e.g., engine wash)

Operational procedures within existing ATM

Infrastructure

ATC modernization; NextGen/NowGen!

Already Motivated to Get as Much as We Can out of These Measures

Fuel is our #1 cost center

Means of Enhancing Fuel/GHG Efficiency

Air Transport Association of America, Inc.

slide10
Co-Founded and Co-Lead the Commercial Aviation Alternative Fuels Initiative (CAAFI)

ATA Alternative Fuels Principles

Safety/Fuel Quality

Supply Reliability

Economic Feasibility

Environmental Benefit

Examples of 2009 Accomplishments

− Agreement for Purchase of Renewable Diesel for GSE at LAX

− Airline MOUs with Two Suppliers for Future Jet Fuel Purchase Agreements

March 2010 Strategic Alliance with DOD/DESC

− Combining knowledge, experience and jet fuel demand

ATA & Alternative Fuels

Air Transport Association of America, Inc.

slide11
By Stimulating R&D and Technology Deployment . . .

But Harmful, Punitive Economic Measures Are Proliferating . . .

European Emissions Trading Scheme (ETS)

U.S. legislative proposals

Proliferation of taxes and charges

Positive Financial Incentives Can Help . . .

Air Transport Association of America, Inc.

slide12
Emissions Monitoring and Reporting Obligations for Airlines Began in 2009

Emissions Trading Required Beginning in 2012

Terms

2012, cap airline emissions at 97% of 2004-2006 emissions levels, 2013+ = 95%

Airlines must purchase 15% of emissions allowances below cap

Airlines must purchase all emissions allowances above cap

Governments “own” the initial allowances up to the cap (source of revenue)

Applies to both EU and non-EU airlines for entire flight to/from Europe

Bad policy – siphons money out of aviation

Violates international law absent mutual consent

ATA challenging in court

But ATA airlines are complying in the meantime

European ETS and Aviation

Air Transport Association of America, Inc.

slide13
Waxman-Markey Cap-and-Trade Legislation Approved by House of Representatives

Airlines would be covered indirectly, but fully

All emissions from the eventual burning of jet fuel must be covered “upstream” by fuel providers = significant tax/surcharge

Significant cost exposure, e.g., @ $25/ton carbon dioxide “charge” = $0.24 additional cost per gallon of jet fuel

No reinvestment of funds into aviation

This specific piece of legislation likely is “dead,” but the concepts continue to be considered . . .

Kerry-Lieberman (Graham?) Expected

Sector-specific, not one-size-fits-all . . .

But transport fuels – maybe including aviation -- could still be covered by defacto tax

U.S. Legislative Proposals

Air Transport Association of America, Inc.

slide14
Negative Impacts on the Airlines’ Ability to Invest in Improvements within the Industry

How Best to Split up Carbon Pie?

Aviation is an extremely fuel- and carbon-efficient economic engine

Consistency with International Law and Policy

International aviation is subject to treaty (“Chicago Convention”), limiting unilateral action

Key Concerns with Punitive Measures

Air Transport Association of America, Inc.

slide15
Global Sectoral Approach Framework for Aviation

International and domestic aviation emissions under framework

Collective aviation-specific emissions targets

Fuel efficiency improvements that result in annual average improvement of 1.5% through 2020

Make the growth of the industry’s emissions “carbon neutral” beginning in 2021

Aspirational goal of 50% reduction in emissions in 2050, relative to 2005 levels

All subject to government investment and “do no harm” so technology, operations & infrastructure improvements flourish

The Way Forward – ATA & Industry Position

Air Transport Association of America, Inc.

slide16
Why These Targets?

They address the key concern . . .growth …

While global aviation currently contributes only 2% of the world’s man-made carbon dioxide (CO2), the concern is that growth in demand will result in growth in emissions

The industry proposal addresses this head-on

While seeking to keep sufficient resources within the industry to allow it to continue its strong record of continuous environmental improvement

The Way Forward (cont.)

Air Transport Association of America, Inc.

slide17

CO2 Emissions

Forecasted Emissions Growth Absent Reduction Measures

Ongoing Fleet Renewal / Technology Development

ATC/NowGen/ Operational Improvements

Low Carbon Fuels

Baseline

2050

Carbon Neutral Growth and Reduction Timeline

How Do We Meet Our Targets? Technology, Fuels, Operations & InfrastructurePotential Role for Carbon Offsets to Bridge

Notional Example

17

Air Transport Association of America, Inc.

slide18
Framework Should Be Established under the International Civil Aviation Organization (ICAO)

Authority for international aviation emissions

Domestic Legislation Should Incorporate This

Not a “carve out,” but a “carve in”

Complementary policy framework: countries must

Implement accelerated ATC modernization, including federal funding for aircraft equipage, training, etc.

Support development and deployment of aviation alternative fuels

Reinstate (and increase) research and development and investment for aircraft technology

Do in context of solid energy policy, including stable fuel supplies and appropriate control of commodity futures speculation

Need International & Domestic Adoption

Air Transport Association of America, Inc.

slide19
If You Want to Feel Good About the Future, Look Up!

We Have a Better Way!

We Are America’s Airlines

Connecting and Protecting Our Planet®

Air Transport Association of America, Inc.