House Democrats are closing ranks over energy legislation that appears likely to win committee approval this week, despite Republican efforts to lure moderates to their side.  The committee will reconvene Tuesday to continue a markup of the bill (HR 2454) that would cap greenhouse gases that have been linked to global warming. The bill now includes language to increase oversight over the markets for carbon allowances and other energy commodities.

HAI has obtained information relating to aircraft and aircraft engines that will likely be contained in the final bill.  The EPA Administrator shall promulgate standards applicable to emissions of greenhouse gases from new aircraft and new engines used in aircraft by December 31, 2012.  The Administrator, in consultation with the Administrator of the Federal Aviation Administration, shall also promulgate standards applicable to emissions of greenhouse gases from other classes and categories of aircraft and aircraft engines for such classes and categories as the EPA Administrator determines appropriate and in the timeframe the EPA Administrator determines appropriate.  The EPA Administrator may revise these standards from time to time.

Emissions of greenhouse gases from new aircraft and new aircraft engines used in aircraft shall achieve the greatest degree of emissions reduction achievable based on the application of technology which the EPA Administrator determines will be available at the time such standards take effect, taking into consideration cost, energy, and safety factors associated with the application of such technology.  Any such standards shall take effect after such period as the Administrator finds necessary to permit the development and application of the requisite technology.

Members will begin offering amendments Wednesday, with potentially hundreds from the Republican side.  But the minority party did not request a reading of the entire bill as a protest move, as many Democrats had feared would occur.

Republicans have objected that the Congressional Budget Office has not yet scored the bill to determine its costs.  The legislation would cap greenhouse gas emissions and issue pollution allowances to industry, which could be traded in the marketplace.

The 27-nation European Union first imposed a cap-and-trade system in 2005, and last year the European Commission and European Parliament voted to explicitly include airlines in the system beginning in 2012.  The Waxman-Markey proposal does not specifically include aviation, but would make oil companies responsible for the emissions created by the transportation fuels they produce.  Those costs presumably would be passed down to airlines when they buy jet fuel.

The proposal would essentially impose a carbon tax on jet fuel and would take money away from helicopter operators that could be spent on modernizing their fleets with more efficient aircraft.  There is a growing realization in the helicopter industry that some sort of cap-and-trade system is inevitable.

If a cap-and-trade system is imposed, HAI would like to see money paid funneled back into the aviation system, where it could be used to modernize air traffic control and fund research into alternative fuels and next-generation engines.