Calls on FERC to Implement Regulatory Reforms, Strengthen Oversight of Pipelines to Encourage Expansion and Upgrade of Refined Products Pipelines
WASHINGTON, January 23, 2018 – Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, today issued a white paper on the transportation of jet fuel from refineries to airports, appealing to the to increase the transparency of pipeline data submissions and strengthen oversight to prevent over-recoveries and excessive returns. Such regulatory reforms are a critical step to ensure that interstate pipelines carrying gasoline, diesel, heating oil, jet fuel and other products invest in essential infrastructure and boost capacity and efficiency to keep pace with demand.
In 2017, U.S.-based jet fuel demand approached 1.7 million barrels per day according to the Energy Information Administration, and consumption is on the rise. Looking ahead, the Federal Aviation Administration (FAA) is projecting a 2.5 percent increase in passenger traffic and a 2.8 percent increase in cargo traffic annually over the next 20 years. Today, interstate refined products pipelines are shipping at full capacity and can’t meet current demand, posing a threat to the future of air service continuity.
“An airline’s ability to run an on-time operation is mirrored by the reliability, affordability and availability of jet fuel,” said John Heimlich, vice president and chief economist at Airlines for America. “Disruptions in pipeline operations and limitations in pipeline capacity force passenger and cargo airlines alike to turn to costly and inadequate alternatives to ensure uninterrupted service to air travelers and shippers. FERC should take proactive steps to protect the needs of consumers, including action on unjust or unreasonable rates, to incentivize pipelines to upgrade or expand existing networks across the country.”
“When it comes to the continuity of air service for our customers, few things are more important than the timely, cost-effective delivery of jet fuel to airports. It is absolutely critical for our nation’s pipelines to facilitate that delivery on affordable terms, allowing U.S. airlines to keep pace with rising air travel demand,” said Michael AuBuchon, director of fuel supply chain management for Southwest Airlines and current chairman of the A4A Energy Council.
“Global commerce depends on a resilient energy supply chain that provides fuel to our freighter aircraft and ground vehicles efficiently and without disruption. It is imperative that that airlines and other constituents continue to work proactively with pipeline companies and the federal government to avoid bottlenecks in the energy supply chain and invest for the future,” said Mike Whitlatch, vice president of energy and procurement at UPS and past chairman of the A4A Energy Council.
Concurrently, U.S. airlines continue to invest in new aircraft and technologies and implement measures that improve jet fuel efficiency and minimize environmental impacts. Between 2000 and 2016, the nation’s airlines consumed three percent less fuel and reduced carbon emissions by three percent, while carrying 28 percent more traffic. The industry will remain committed to advancing sustainability while pursuing meaningful infrastructure investment that will benefit the flying and shipping public at large.
More information can be found in Airlines for America’s white paper, Jet Fuel: From Well to Wing, which offers insight into jet fuel pricing, the process of separating crude oil into petroleum products, and the distribution of jet fuel from refineries to the wing of the aircraft. The document also outlines the various risks associated with on-and-off airport disruptions that could threaten fuel supply, the operational remedies available to airlines when these disruptions occur, and critical steps that can be taken to address the capacity constraints of our current interstate pipeline system.
Annually, commercial aviation helps drive $1.5 trillion in U.S. economic activity and more than 10 million U.S. jobs. U.S. airlines fly 2.3 million passengers and more than 55,000 tons of cargo each day. Airlines for America (A4A) advocates on behalf of the American airline industry as a model of safety, customer service and environmental responsibility and as the indispensable network that drives our nation’s economy and global competitiveness.
A4A works collaboratively with the airlines, labor groups, Congress and the Administration to improve air travel for everyone.