Aviation and the Environment: Initial Voluntary Airport Low Emissions Program Projects Reduce Emissions, and FAA Plans to Assess the Program's Overall Performance as Participation Increases
Released: 2008-11-07T00:00:00

Letter

Background

Although aviation-related activities produce a small amount of the total air pollution in the United States, according to EPA, the types of pollutants emitted by these activities are among the most prevalent and harmful in the atmosphere and are expected to increase based on the forecasted growth in the aviation sector. The major sources of emissions at airports are aircraft, the ground equipment (such as vehicles that transport baggage) that services the aircraft, and vehicles transporting passengers to and from the airport. The emissions produced by these sources include carbon monoxide; toxic substances (such as benzene and formaldehyde); particulate matter; sulfur dioxide; and nitrogen oxides and volatile organic compounds, which contribute to the formation of ozone, a major pollutant in many metropolitan areas and a major concern to many airport operators and to state and local air quality authorities. In addition, the potential health effects of particulate matter are becoming an increasing concern of these groups.

In response to concerns about emissions from airport sources, the Vision 100—Century of Aviation Reauthorization Act (Vision 100), signed into law in December 2003, established a voluntary program to reduce airport ground emissions at commercial service airports in air quality nonattainment and maintenance areas. Geographic areas that have levels of a criteria pollutant above those allowed by the standard are called nonattainment areas. Areas that did not meet the standard for a criteria pollutant in the past but have reached attainment and meet certain procedural requirements are known as maintenance areas. The program, according to FAA, is intended to help airports meet their obligations under the CAA, and to assist regional efforts to meet National Ambient Air Quality Standards set by EPA for limiting the amount of the six criteria pollutants considered harmful to public health and the environment. States that have areas exceeding these standards are required to develop and implement a plan, known as a State Implementation Plan (SIP), for bringing the areas into compliance with the standards. Under the CAA conformity provision, no federal agency may approve or provide financial assistance for any activity that does not conform to an applicable SIP.

To implement the Vision 100 provisions relating to airport emission reductions, FAA created and began implementing the VALE program in 2004. According to FAA, in the 9-month period between the passage of the act in 2003 and the implementation of the VALE program, the agency—in cooperation with EPA and the Department of Energy—developed program guidelines and application procedures; technical requirements, such as standards for low-emission vehicles; and a system for assigning credits to airports for emission reductions.

The FAA relied on experience with the FAA Inherently Low Emission Airport Vehicle (ILEAV) Pilot Program to design the VALE program. Authorized under the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21), the ILEAV pilot program operated from 2001 to 2005. Six airports implemented ILEAV projects with individual grants of up to $2 million each to demonstrate the benefits and economic feasibility of low-emission vehicles and supporting infrastructure. According to FAA, the pilot program projects also provided useful information about the environmental and economic trade-offs of alternative fuels, their safe handling, and the commercial availability of low-emission technology.

Airports eligible for the VALE program can apply for federal AIP entitlement funds or discretionary funds under the “set-aside” for noise and air quality projects. With FAA approval, eligible airports may also use their PFCs to finance VALE projects. According to FAA officials, VALE grants using discretionary set-aside funds have no impact on the amount of entitlement funds an airport receives through AIP, since AIP entitlements are based on a legislated apportionment formula tied to the number of passengers an airport enplanes. FAA officials stated that most participating airports seek set-aside funding for VALE projects because VALE projects only compete in this portion of the AIP budget against noise reduction projects. According to FAA officials, the agency considers the approval and funding of VALE projects on a case-by-case basis based on the project’s relative importance to other eligible airport activities. FAA officials stated that prior to the establishment of VALE, the only emission- reduction projects eligible for AIP grants and PFC use were those intended to reduce emissions as a condition of approval of an environmental action associated with an AIP-funded airport development project. These officials also noted that the VALE program expands AIP and PFC eligibility into new areas, such as airport mobile sources, including vehicles.

VALE projects may be stand-alone projects (i.e., they do not have to be linked to a project that could increase emissions to be eligible for program funding); however, for a project to be approved, it must meet specific criteria. For example, an airport must demonstrate that the project will result in emission reductions. Although according to FAA officials, these reductions are “surplus” in the sense that they are not required in the SIP for meeting CAA standards. To demonstrate that a project will lower emissions, an airport must prepare estimates comparing the amount of emissions currently produced with the amount of emissions that will be produced after the project is implemented. To prepare these emission estimates, airports use FAA’s Emissions and Dispersion Modeling System (EDMS), which calculates emissions from project-related airport sources, such as aircraft, ground service equipment, and shuttle buses. The airport must also demonstrate, among other things, that the VALE project will result in permanent emission reductions. According to FAA officials, using the EDMS air quality model ensures the reliability of emission- reduction estimates and reduces planning costs.

VALE’s authorizing legislation and implementing guidance greatly expanded AIP and PFC eligibility for low-emission technology, including the purchase of low-emitting hybrid vehicles and electric-powered equipment used to service aircraft, such as baggage tugs. FAA officials stated that VALE employs an innovative approach by converting EPA average national fleet standards into low-emission standards for each VALE vehicle purchase. All vehicles and engines that are eligible for AIP or PFC funding under the VALE program must either be EPA certified (new vehicles) or EPA verified (retrofit technology). VALE low-emission standards for all new vehicles are based on EPA average national fleet standards and are referenced, in some cases, to comparable California Air Resources Board standards. The VALE program sets emission standards at cleaner levels than presently required by EPA. According to FAA officials, a goal of the VALE program is to encourage airports to make investments in capital equipment to provide substantial emission-reduction benefits over many years. The VALE program is also intended to support U.S. energy independence by emphasizing domestically produced alternative fuels that are substantially nonpetroleum based. Also, the program is designed to provide airports with financial and regulatory incentives to increase their investments in proven low-emission technologies. FAA officials stated that FAA, EPA, and the Department of Energy coordinate on an ongoing basis VALE program standards, including nonattainment status for airport eligibility and eligible alternative fuels.

The legislation authorizing the VALE program also provides a means for airports to receive credits for the emission reductions achieved through VALE projects and use these credits to comply with federal CAA air quality standards. Before the VALE program was instituted, airports could not receive credit for voluntary emission reductions. Therefore, any voluntary reductions lowered an airport’s emission baseline, which is used to calculate the impact of future emissions, and thus airports would need to find further emission reduction options to obtain approval for future projects. In 2003, we reported that because of this situation, some airport officials told us that they waited to initiate emission-reduction efforts until these efforts were needed to gain approval for an expansion project. The EPA issued national guidance in September 2004 on how airports can receive airport emission-reduction credits (AERC) for VALE projects and apply those credits to future airport projects to meet certain CAA requirements. AERCs can be used to mitigate future airport project emissions, as long as they will be earned in the year for which they will be applied. To be approved for the VALE program, an airport must obtain a commitment from the state’s air quality authority that it will approve the use of AERCs for projects to conform to federal air quality requirements, should the airport choose to use them for this purpose.

A Small Number of Eligible Airports Have Used VALE Funding to Help Reduce Airport Emissions, but Participation in the Program Is Increasing

While the number of airports that have undertaken VALE projects since 2004 is relatively small compared with the number of eligible commercial airports—9 of 160—the number of participants is increasing, as are the range of projects being conducted and the amount of money spent on them.

Few Eligible Airports Have Initiated VALE Projects, but FAA Expects Participation to Increase

Participation in the VALE program has been limited to date, although the number of airports applying for the program is increasing, and FAA expects more airports to seek VALE funding as they become more familiar with the program. About 160 of the 524 commercial service airports are eligible to participate in the VALE program; however, as of September 2008, 9 airports had received VALE program funding. (Fig. 1 shows the locations of airports participating in VALE.) According to FAA officials, all airports that have applied to participate in VALE have been approved.

Participation in the VALE program has risen in recent years. For example, in 2005, the first year of the program, FAA approved VALE projects for 2 airports. In fiscal year 2008, FAA approved 11 projects at 6 airports, 4 of which were new participants in the program. Overall, FAA reports that a total of 20 projects at 9 participating airports are under way. In fiscal year 2009, FAA expects additional VALE participants. For example, the Seattle- Tacoma International Airport has proposed a multiyear project to purchase electric ground support equipment, with a $3.1 million first phase beginning in fiscal year 2009. FAA officials stated that FAA regional officials are considering the airport’s application to fund this project through VALE.

FAA officials stated that as the VALE program matures, and concerns about foreign oil, climate change, and fuel prices influence public policy, airport participation in the VALE program is expected to grow. These officials noted that they expect VALE applications to increase as airports learn more about the program and about projects initiated at other airports, and that numerous airports throughout the country have recently expressed their interest in the program. FAA points to the Part 150 Noise Compatibility Program as an example of an airport environmental program that grew gradually. The Part 150 program provides guidance to airports on the types of land use that are incompatible with certain levels of airport noise and encourages airports to develop a noise compatibility plan to reduce and prevent such uses. Airports that develop such plans can receive AIP noise set-aside funds, which, among other things, can be used to (1) soundproof residences and public buildings, such as schools, and (2) support relocation by acquiring homes in areas that experience significant noise exposure. When the Part 150 program was initiated in the early 1980s, only a few of the approximately 3,000 eligible airports completed compatibility plans and applied for AIP grants. However, the program has grown over the years and, as of fiscal year 2007, nearly 300 airports have participated. According to FAA officials, the growth of the VALE program in its first 4 years of existence has outpaced that of the Part 150 program during its initial 4 years, particularly considering that far fewer airports are eligible for VALE than for the Part 150 program.

FAA officials responsible for the VALE program have conducted outreach to eligible airports in a number of ways, but these officials believe that more outreach is needed. FAA’s VALE outreach efforts include making presentations at conferences attended by airport executives and working with airport associations—including Airport Council International, North America (ACI-NA), and the American Association of Airport Executives— to disseminate information about the program to eligible airports. FAA has also provided guidance to FAA regional staff on the program and encourages these staff to contact airports in their region about VALE. However, FAA officials noted that few regional staff are available to work on VALE outreach, and that more resources to administer the program and provide technical assistance to airports could increase participation. FAA officials noted several instances where airports learned about VALE too late in the process of planning expansion projects to fully take advantage of assistance offered through the program. For example, Detroit Metropolitan Wayne County Airport began installing its fuel hydrant system before its VALE grant was issued to meet its project deadline; therefore, only part of the system was covered by a VALE grant. Officials at this airport noted that had they known about VALE earlier, they could have submitted their application in time to use VALE funding for the entire project.

Although FAA may be correct in its assumption that VALE will follow the Part 150 program’s experience of participation levels gradually increasing as the program matures, we found several reasons that airports are not currently participating in VALE.

Officials at all four of the nonparticipating airports we contacted stated that VALE emission-reduction projects currently are not a high-priority use of AIP funds when compared with airport expansion or improvement efforts. For example, these officials stated that they prefer to use AIP funds for higher-priority safety and airport efficiency and capacity improvement efforts. However, these officials noted that reducing emissions is important for addressing community air quality concerns. In addition, officials at two nonparticipating airports, as well as an official at one airport that has been approved for a VALE project, said that it was their understanding that VALE projects compete for AIP funds with all AIP-eligible projects. Consequently, the two nonparticipating airports chose not to pursue VALE projects and the participating airport has limited the scale of its VALE project to use AIP funds for high-priority projects. FAA officials stated that these airports have a misperception of VALE AIP grants in that VALE projects do not compete with most other types of AIP-eligible projects at airports, because VALE projects are funded through a 35 percent set aside earmarked for noise-abatement and emission-reduction projects. Therefore, VALE AIP grants have no effect on an airport’s eligibility for other types of AIP grants.

ACI-NA officials noted that some airports may not be best positioned to take advantage of the VALE program because they have no relevant capital projects planned or do not need to replace ground service equipment, which has up to a 15-year life cycle. Officials from one of the nonparticipating airports we contacted stated that most of the airport’s facilities and equipment are relatively new and will not need to be replaced in the near future. Also, officials at the four nonparticipating airports we contacted stated that they already have some of the equipment and facilities that are eligible under VALE.

Officials from one airport noted that their airport lacked the expertise to conduct the emissions inventory required to establish a baseline for measuring VALE project emission reductions. FAA officials noted that airports eligible for VALE, including smaller airports with less planning resources, typically can be reimbursed by FAA for project formulation costs, including hiring a contractor to assist in conducting the emissions inventory and preparing the VALE application, if the project is approved.

FAA officials and airport officials noted that some airports have been reluctant to seek approval for emission-reduction credits from their state air quality authority, as FAA requires before it will approve a project. According to these officials, some airports have little experience in dealing with their state air quality authority because airport emission reductions previously have not been necessary as part of the CAA SIP. Officials from one airport we visited stated that it is their impression that the state air quality authority will not grant emission-reduction credits for any reason, and, consequently, the airport had not pursued a VALE grant, even though it is currently undertaking a terminal and gate expansion project. According to FAA officials, the guidance that EPA has developed for AERCs provides instructions to state air quality officials on the process and criteria for issuing AERCs to airports.

Participating Airports Have Initiated a Range of VALE Projects

The VALE projects initiated at airports have ranged from purchases of small numbers of fuel-efficient, low-emitting vehicles to projects that help decrease aircraft ground emissions. Table 1 shows a summary of the projects at the airports participating in the VALE program from fiscal years 2005 through 2008.

Detroit Metropolitan Wayne County Airport has used VALE funding to install systems to supply electricity and air conditioning to aircraft from gates at a new terminal that opened in September 2008, eliminating the need for aircraft to run their auxiliary engines to power and cool aircraft while loading and unloading passengers, thereby reducing emissions (see fig. 2). The airport has also partially relied on VALE funding to install an underground fuel hydrant system for refueling aircraft, which reduces emissions by eliminating the need to truck fuel to the aircraft.

Several other airports have used the VALE program to purchase low- emitting vehicles for use at the airport. For example, George Bush Intercontinental Airport and William P. Hobby Airport, which are both owned by the city of Houston, have received VALE funding to purchase 37 hybrid cars and sport utility vehicles, and Albany International Airport has purchased natural gas-powered shuttle buses and other low-emitting vehicles through VALE (see fig. 3). As table 1 indicates, George Bush Intercontinental Houston Airport and Philadelphia International Airport have also used VALE funding to purchase ground service equipment, such as baggage tugs and power stations to recharge this equipment.

The scope of VALE projects at airports has also been increasing. For example, in fiscal year 2008, Philadelphia International Airport received FAA approval for a $3.4 million VALE grant for electric tugs that transport baggage, systems for supplying electricity and air conditioning to aircraft at gates, and hybrid vehicles. FAA officials noted that this is the first VALE project with airline participation. United Airlines has agreed to keep 10 of its electric baggage tugs at the airport for their entire useful life in exchange for the airport agreeing to purchase a recharging station for the tugs through VALE. Similarly, US Airways agreed to purchase 34 new electric ground support vehicles for use at Philadelphia International. For this project, US Airways obtained a grant from Pennsylvania through the state’s Alternative Fuels Incentive Program to fund part of the purchase of the tugs. George Bush Intercontinental Houston Airport, which previously used VALE to purchase hybrid vehicles, increased its participation in the VALE program to include funding the expansion of its people-mover system and other projects.

Expenditures for the VALE Program Are Increasing

Expenditures for the VALE program have increased significantly as the program has matured. In fiscal years 2005 and 2006, VALE funding for projects totaled less than $400,000, but has increased to nearly $20 million for projects funded through fiscal year 2008, including the airports’ required share for AIP-funded projects. About 56 percent of these expenditures occurred in fiscal year 2008. Table 2 indicates that most of the VALE funding came from the AIP program. To date, no airports have applied PFC funds to VALE projects. Officials at Philadelphia International Airport had initially intended to use PFC funds to meet its required 25 percent share for its VALE grant, but later decided to rely on other funding sources for this share. According to FAA officials and officials of the seven participating airports we contacted, because there is more flexibility in using PFC funds for airport projects than in using AIP funds, participating airports use AIP funds for VALE projects and apply PFCs to other types of projects, such as terminal improvement projects, that may not be eligible for any type of AIP grants. In addition, these participating airport officials, as well as FAA officials, said that VALE projects have to compete with all other priorities for PFC use, and many PFC priority projects have been set well into the future. For example, officials at one airport we visited said that the airport currently collects the maximum $4.50 PFC, and that all PFCs collected have already been dedicated to capital projects, including building a new terminal with six additional gates.

While VALE Projects Reduce Emissions, FAA Plans to Assess the Program’s Overall Performance as Participation Increases, and Two Airports Have Used Emissions Credits

VALE projects have reduced emissions at participating airports, according to FAA officials, and FAA plans to assess the overall performance of the VALE program in reducing emissions across airport activities as participation in the program increases. Thus far, two airports have taken advantage of emission credits available through the program to offset emissions from planned construction projects.

VALE Projects Reduce Emissions at Participating Airports

The estimated emissions reductions resulting from VALE projects initiated at airports vary, depending on the type and scope of the project. Table 3 shows the estimated reductions in tons of criteria pollutants, including nitrogen oxides, volatile organic compounds, carbon monoxide, and particulate matter. Airports use FAA’s EDMS, which calculates emissions produced by aircraft and equipment used at airports. Airports determine the estimated reductions by comparing the estimated amount of pollution produced before the project was initiated with the estimated amount after it was implemented. For example, officials at George Bush Intercontinental Houston Airport compared the estimated amount of pollution produced by the airport’s conventional vehicles with the estimated amount of pollution produced by the replacement hybrid vehicles purchased with VALE funding.

According to FAA officials, the emission reductions resulting from VALE projects, although relatively large in the case of some projects, represent a small portion of total emissions at the participating airports. For example, the VALE project at Philadelphia International Airport is projected to reduce nitrogen oxide emissions by about 1 percent. In addition, some of the VALE projects would have been undertaken even without VALE funding. For example, according to Detroit Metropolitan Wayne County Airport officials, the airport would have used other funding sources to install systems to supply electricity and air conditioning to aircraft at the gates of its new terminal even if it had not received an AIP grant through the VALE program for this purpose. However, airport projects that are not part of the VALE program may not receive emission credits from their state air quality agency.

According to FAA officials, the agency has taken steps to ensure that estimates of emission-reductions from VALE projects are quantified accurately. These steps include developing and updating emission standards for airport vehicles eligible for VALE in cooperation with EPA. FAA also publishes a technical report that contains vehicle emission standards as well as guidance on how to do the required emission inventories for proposed VALE projects. In addition, emission reduction estimates that airports are required to provide are verified by FAA regions using a formal checklist. The estimates are also checked by FAA headquarters and by the airport’s EPA region and state air quality agency.

FAA officials are developing a methodology to assess the cost- effectiveness of VALE projects in reducing emissions and plan to develop other measurable performance objectives. As part of its oversight of the VALE program, FAA evaluates the cost-effectiveness of VALE projects based on a comparison of emission reductions over the useful life of the project and the total project costs. FAA recognizes that cost-effectiveness may vary by project type, the way the project is implemented, and airport size. For example, according to FAA, gate electrification projects tend to provide the largest emission reductions and are the most cost-effective, while a project involving a refueling station tends to yield lower cost- effectiveness. FAA has developed specific cost-effectiveness measures for gate electrification projects initiated under VALE based on actual program experience to date. According to FAA, these projects have reduced ozone and carbon monoxide at a cost of $7,000 and $6,000 per ton, respectively. To further develop its cost-effectiveness methodology, FAA plans to expand its cost-effectiveness ranges to include other types of VALE projects. FAA officials stated that based on the number and size of VALE projects funded to date, they believe more history and experience with the VALE program is needed before they can develop other performance measures, such as setting goals for the number of projects implemented and the amount of reductions achieved through these projects. Nevertheless, FAA program officials noted that they have set an informal goal for each of FAA’s nine regions to approve at least one VALE project in fiscal year 2009. An EPA official involved in the development of the VALE program noted that a future requirement should be the development of the cost-effectiveness and efficiency measures for the VALE program to hold airports and the federal government accountable for results.

As we have previously noted, airports that participate in the VALE program can apply to their state or local air quality authority to receive AERCs for emission reductions achieved through the program. To date, two airports have obtained these credits to help mitigate the increases in emissions resulting from airport development projects. FAA officials stated that while most airports that participate in VALE are mainly interested in receiving VALE funding, some airports also plan to use emission credits to meet CAA conformity requirements. As of June 2008, William P. Hobby Houston Airport and George Bush Intercontinental Houston Airport have applied for and received a formal AERC statement from the Texas Commission on Environmental Quality, which allows the airports to use their AERCs to mitigate emissions from airport development projects. For example, Houston Intercontinental will use AERCs in its environmental impact statement for a terminal expansion project to help satisfy CAA conformity requirements. According to FAA, other airports, including Philadelphia International, are planning to use emission credits to offset emissions from development projects currently under way. For example, Philadelphia International Airport plans to use AERCs to satisfy CAA conformity requirements to offset the emissions produced in the construction of its ongoing capacity enhancement project, which includes a new airport runway. Airport officials at Philadelphia International expect that the state will approve these credits. Officials with whom we spoke from two airports that have initiated VALE projects but that have not applied for earned AERCs stated that they currently have no ongoing development projects, or have not needed the credits for ongoing projects because the resulting emissions fall within federal standards. In addition, FAA officials indicated that some airports do not need AERCs for expansion projects, but are expressing interest in participating in the VALE program to buy low-emitting equipment partly because such equipment uses less fuel, and rising fuel prices have put a strain on airport finances.

Agency Comments and Our Evaluation

We provided copies of a draft of this report to EPA and the Department of Transportation for review and comment. EPA and FAA both provided several clarifying comments and technical corrections, which we have incorporated in this report as appropriate. We also received comments from officials in FAA’s Office of Airport Planning and Programming, including the National Resource Advisor, Noise and Air Quality who is responsible for managing the VALE program. FAA generally agreed with the report’s findings. The FAA representatives, however, stated that the draft suggested that FAA was not aware of the performance of the VALE program, and that tracking program benefits and performance is one of VALE’s strongest attributes. We modified the report to more clearly reflect that FAA is developing a methodology to assess VALE’s cost-effectiveness and plans to develop other measurable performance objectives, but that FAA has yet to assess the overall performance of the VALE program. The representatives also stated that while the report covers the various elements of the VALE program, they also wanted to emphasize the “innovativeness” of the program. In this regard, they noted that VALE represents a new model for government efforts to promote clean fuels and technology. For this reason, they state and we point out in the report, EPA is recommending in current proposed revisions to its General Conformity Regulations that the VALE system for granting emissions credits be expanded to all actions subject to General Conformity Regulations. The FAA representatives also provided information on what they regarded as other innovative elements of the VALE program, which we have incorporated in this report as appropriate.

We are sending copies of this report to interested congressional committees, the Secretary of Transportation, the FAA Administrator and the EPA Administrator. We will also make copies available to others on request. In addition, this report will be available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staffs have any questions about this report, please contact me at (202) 512-2834 or dillinghamg@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix II.

Appendix I: Airports GAO Contacted with and without VALE Projects

Airports with VALE Projects

Albany International (ALB)

Detroit Metropolitan Wayne County (DTW)

George Bush Intercontinental Houston (IAH)

Greater Rochester International (ROC)

Philadelphia International (PHL)

Stewart International (SWF), Newburgh/New Windsor, New York William P. Hobby Houston (HOU)

Eligible Airports without VALE Projects

Chicago O’Hare International (ORD)

Denver International (DEN)

John Wayne Airport-Orange County, California (SNA)

Los Angeles International (LAX)

Appendix II: GAO Contact and Staff Acknowledgments

Staff Acknowledgments

In addition to the contact named above, individuals making key contributions to this report include Edward Laughlin (Assistant Director), Lauren Calhoun, James Geibel, Delwen Jones, Rosa Leung, Josh Ormond, Stan Stenersen, and Larry Thomas.