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The lower carbon aviation fuel puzzle

Presented by the Association of American Railroads: Delivered every Monday by 10 a.m., Weekly Transportation examines the latest news in transportation and infrastructure politics and policy.
May 15, 2023 View in browser
 
POLITICO's Weekly Transportation newsletter logo

By Kayla Guo and Alex Daugherty

Presented by

Association of American Railroads

With help from Tanya Snyder

Quick Fix

— Hydrogen aviation companies are pushing for a share of federal investments in lower-carbon aviation fuel — to a mixed reception.

— It’s Infrastructure Week, and Biden administration officials are traveling the country to beat the drum on progress made since the infrastructure law was signed.

— The four biggest electric bike- and scooter-share companies in North America have a proposed plan for managing micromobility across cities.

IT’S MONDAY: You’re reading Morning Transportation, your Washington policy guide to everything that moves. I’m your host, Kayla Guo. Send tips, thoughts, song lyrics and recipes you like to kguo@politico.com. Find us on Twitter @kaylaguo_, @alextdaugherty and @TSnyderDC.

“Celebrate good times, come on / Let's celebrate / There's a party going on right here / A celebration to last throughout the years.”

A message from the Association of American Railroads:

America’s economy relies on freight rail to deliver 1.7 billion tons of goods every year. And the communities we serve expect us to do this safely. We take this commitment seriously, which is why we’ve taken extensive action for decades to reduce accidents—leading to a 44% drop in mainline accidents since 2000. And we won’t stop there. Today, we’re taking decisive steps to further prevent accidents and minimize potential impacts to the communities we serve. See what we’re doing now.

 
Driving the Day

HYDROGEN VS. SAF: The FAA bill presents an opportunity for Congress to spend millions (and possibly billions) on the development of lower-carbon aviation fuel. But sustainable aviation fuel, the solution that can get off the ground today (pun intended), comes with drawbacks. Hydrogen aviation companies want federal investments to be based on carbon outputs, where they perform better than SAF, which reduces emissions but doesn’t eliminate them. And they also want the FAA’s regulatory capacity expanded so the industry can innovate faster. Alex has more.

“We want a level playing field for novel technologies,” said Val Miftakhov, CEO of ZeroAvia, which is developing hydrogen-powered commercial aircraft.

— But others in the aviation industry are skeptical about the viability of hydrogen, electric or other kinds of alternative fuels beyond SAF, which is sourced from cooking oil, solid waste, animal fats and other forms of waste. Critics argue that sources like hydrogen may never be scalable for larger commercial aircraft, and would require airplane engines to be redesigned even if they could. SAF, on the other hand, can be fed right into existing gasoline-powered engines, making it the airline industry’s preferred option. In addition, many companies that produce sustainable aviation fuel sources, notably farms, have lawmakers’ ears.

— Ryanair Chief Financial Officer Neil Sorahan dismissed the commercial viability of hydrogen- and electric-powered commercial planes, telling reporters in Washington last week at an event unveiling a major purchase order between Ryanair and Boeing, “I’m not sure they will get there in my lifetime.”

— SAF, however, is still a relative drop in the bucket. While production tripled last year to 15 million gallons, that accounts for just .08 percent of the 17.5 billion gallons of aviation fuel used in the last year by airlines. Airlines for America is aiming for airlines to use 3 billion gallons of SAF by 2030, a total that would represent 17 percent of all jet fuel used in 2022.

 

GET READY FOR GLOBAL TECH DAY: Join POLITICO Live as we launch our first Global Tech Day alongside London Tech Week on Thursday, June 15. Register now for continuing updates and to be a part of this momentous and program-packed day! From the blockchain, to AI, and autonomous vehicles, technology is changing how power is exercised around the world, so who will write the rules? REGISTER HERE.

 
 
Infrastructure

ONE YEAR LATER: It’s Infrastructure Week, and the Biden administration is fanning out across the country to tout the progress it’s made since President Joe Biden signed the bipartisan infrastructure law one year ago. Some highlights:

— The White House senior advisor and infrastructure coordinator, Mitch Landrieu, has a packed Tuesday: He’ll participate in the United for Infrastructure Steering Committee National Event, lead a gathering of the State Infrastructure Coordinators at the White House and speak at the Edison Congress 2023 Conference focused on North America’s electric industry.

— USDA Secretary Tom Vilsack, White House Deputy Chief of Staff John Podesta and White House National Climate Adviser Ali Zaidi will host an event announcing the IRA’s investment in rural electrification on Tuesday, too, and on Wednesday first lady Jill Biden will go to Bethel, Alaska, to plug infrastructure law investments in broadband connectivity in Indigenous communities, including Alaska Native communities. And closing out the week, FTA Administrator Nuria Fernandez will go to the groundbreaking for the new Potomac Yard Metro station on Friday. Here’s the full calendar of events, which are hosted by nonprofit Accelerator for America Action.

 

A message from the Association of American Railroads:

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Transportation

SCOOTERS, A HOW-TO GUIDE: The four biggest electric bike- and scooter-share companies in North America have come up with a proposed framework for cities looking to effectively manage micromobility. For example, they recommend setting a 15-mph speed limit and starting with one vehicle per 500 people in the city. They also have thoughts about when dockless parking works — lower-density areas, and with clear rules about no-parking zones in highly pedestrianized areas — and where parking corrals are better, like downtown areas.

Rail

GHOST OF DEBT CRISES PAST: Railroad workers saw their sick and unemployment benefits slashed by 5.7 percent last week in cuts that were put on pause for two years during the pandemic, and which were negotiated as part of the agreement to resolve the 2011 debt ceiling crisis, The Washington Post reports. The reductions come against the current backdrop of gridlock between the White House and House Republicans on raising the debt ceiling, and after labor groups were already frustrated with the Biden administration, if you’ll recall, for imposing a labor contract without paid sick leave in the fall.

 

DON’T MISS POLITICO’S HEALTH CARE SUMMIT: The Covid-19 pandemic helped spur innovation in health care, from the wide adoption of telemedicine, health apps and online pharmacies to mRNA vaccines. But what will the next health care innovations look like? Join POLITICO on Wednesday June 7 for our Health Care Summit to explore how tech and innovation are transforming care and the challenges ahead for access and delivery in the United States. REGISTER NOW.

 
 
Aviation

BUYBACK TUSSLE: The U.S. Chamber of Commerce sued the SEC on Friday in a bid to block the Wall Street regulator's new stock buyback disclosure rule, which will force public companies to provide investors with more details about when they are buying back stock, how much and why, Declan Harty reports. The rule’s finalization came on the heels of a surge in corporate buybacks, which have long been a point of concern for investor advocates and Democratic lawmakers who question whether it is the best use of a company's excess cash.

— If you remember, one of the restrictions for airlines receiving federal pandemic relief money is that they not engage in stock buybacks. So far, zero major airlines have announced plans to resume buybacks, though Southwest Airlines was the first major airline to bring back dividends late last year (just before its holiday meltdown). Democratic lawmakers also urged airlines not to resume buybacks after the restrictions tied to pandemic relief were lifted in October of last year.

AIR TRAVEL ON THE UP: U.S. airlines exceeded pre-pandemic international travel levels in February, setting a new all-time high of almost 10 million passengers — 1.7 percent over the previous record set in January 2020, according to new BTS data. U.S. airline traffic more generally, both domestic and international, is well on its way back to pre-pandemic levels, with February seeing system-wide traffic just 2.3 percent below January 2020’s all-time-high and domestic traffic down just 2.8 percent from January 2020. The FAA and aviation industry, meanwhile, are gearing up for a summer travel season that’s expected to resemble or exceed pre-pandemic levels.

Energy

PROGRAMMING ALERT: Don’t miss POLITICO’s first-ever energy summit on Thursday, which will feature speakers including Energy Secretary Jennifer Granholm, White House Infrastructure Coordinator Mitch Landrieu, Sen. Ed Markey (D-Mass.), Council of Economic Advisers member and Chief Economist of the Invest in America Cabinet Heather Boushey, and others. The summit will dig into the critical questions of how the U.S. is positioning itself in a complicated energy future, what policy and regulatory solutions are viable in Washington to advance the clean energy agenda, and more. Register here.

The Autobahn

— “What congestion pricing in NYC will mean.” Bloomberg.

— “Google’s A.I. bonanza and driverless car talk with Cruise CEO Kyle Vogt.” The New York Times.

— “Tesla shouldn’t call driving system Autopilot because humans are still in control, Buttigieg says.” The Associated Press.

— “Pilots at United picket for higher pay as pressure builds before summer travel season.” The Associated Press.

— “Jet orders boom as airlines fear shortage.” Reuters.

— “Will EVs dent the auto repair business?” The Wall Street Journal.

A message from the Association of American Railroads:

For decades, America’s freight railroads have gone above and beyond federal safety requirements to ensure we remain the safest way to move goods over land. This includes using advanced technology to inspect and assess our network, helping us ensure our infrastructure and equipment remain sound. Despite these efforts, recent incidents have shown that there is more work to do, and we will take the lessons learned to get safer each day.

Proactive, transparent and collaborative measures with communities and policymakers are key. That’s why we’re installing additional hot bearing detectors, providing even better training and support for first responders, and improving collaboration across rail companies so we can make informed decisions based on shared data. These broad industry-wide steps are only the first of many we’re taking to make the rail network even safer. Read more about our commitment to the communities we serve.

 
 

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