The Coalition's Response to the House Technology and Infrastructure Committee's Concerns Regarding PHMSA’s Proposed Rulemaking on Lithium Batteries

Commercial aviation helps drive more than 10M American jobs and 5 cents of every dollar of U.S. GDP
Commercial aviation drives more than $1 trillion per year in economic activity
In 2012, U.S. airlines moved more than 48,000 tons of cargo per day
In 2012, the value of a kilogram of U.S. merchandise exported by air averaged 121 times the value exported by sea
For every 100 airline jobs, some 360 are supported outside of the airline industry
Federal taxes constitute $61 – or 20% – of the price of a typical $300 domestic round-trip ticket
In 2011, U.S. airlines carried 16 percent more passengers and cargo using 10 percent less fuel than in 2000
Domestically, airlines drive 5% of economic activity but account for 2% of man-made GHG emissions
From 2000-2011, airlines reduced GHG emissions by 11% while transporting 16% more passengers and cargo
From 1975-2011, U.S. airlines and their partners reduced significant noise exposure by 99%
Commercial air travel is the safest form of intercity transportation in the United States
In the most recent decade, scheduled air service on U.S. airlines was seven times safer than in the 1970s
From 2000-2012, U.S. airlines improved the on-time arrival rate from 72.6% to 81.9%
From 2000-2012, U.S. airlines reduced the flight cancellation rate sharply from 3.30% to 1.29%
Airfares are a bargain: From 2000-2012, U.S. CPI rose 33% while average domestic fare rose just 13%
Adjusted for inflation, the average round-trip domestic airfare fell 15% from 2000
2007 domestic flight delays cost the United States approximately $31 billion
In 2012, the value of U.S. merchandise exported by air reached an all-time high of $427B
In 2012, U.S. exports of air-travel services reached an all-time high of $39.5B, driving a $5.1B trade surplus
In 2012, U.S. passenger and cargo airlines spent more than $50B on fuel, averaging 36% of operating expenses
In 2012, U.S. airlines posted the lowest annual rate of mishandled baggage ever recorded
FAA projects U.S. air travel demand to top 1 billion passengers in 2027
In 2012, US airlines flew 83.4 million passengers in scheduled international service - a record high
In 2012, the total value of merchandise exported from or imported to the United States by air exceeded $927 billion
In 2012, 7.15 teragrams of merchandise was exported from or imported to the United States by air

	The Coalition's Response to the House Technology and Infrastructure Committee's Concerns Regarding PHMSA’s Proposed Rulemaking on Lithium Batteries
	PubZone1 July 15, 2010 The Honorable Ray LaHood Secretary of Transportation U.S. Department of Transportation 1200 New Jersey Avenue, SE Washington, DC 20590–0001 Re: PHMSA’s Proposed Rulemaking on Lithium Batteries Docket No. PHMSA-2009-0095 (HM-224F) Dear Secretary LaHood: We respectfully write to express our concerns about the issues raised in a June 14, 2010 letter from House Transportation and Infrastructure Committee Chairman Oberstar and Congressman Costello regarding PHMSA’s proposed rulemaking on lithium batteries (HM-224F). We share your commitment and the commitment of your former colleagues in Congress to transportation safety and believe that transportation practices related to certain lithium batteries can be improved. We also support making the U.S. regulations consistent with international standards. However, we believe that PHMSA’s proposed rulemaking on lithium batteries exceed what is necessary to achieve additional safety benefits, and will impose drastic costs on consumers, retailers and manufacturers of batteries, electronic equipment and medical devices. We fully understand Chairman Oberstar’s and Congressman Costello’s concerns about the impacts that lithium batteries could have on aircraft operations. However, some of the statements in their June 14, 2010 letter are inaccurate and misleading regarding issues associated with the transport of lithium batteries and the impact the rulemaking will have on U.S. businesses. The attached pages contain excerpts (in bold italics) from their letter and our responses to these statements. We appreciate this opportunity to correct the record with respect to the concerns raised in the letter from Chairman Oberstar and Congressman Costello. As you are now well aware, PHMSA’s lithium battery rulemaking is more complex and has far greater implications for battery, electronic equipment and medical device manufacturers, retailers and battery recyclers than PHMSA ever anticipated. All of these implications will in turn be felt throughout the U.S. economy. For these reasons, we strongly suggest that PHMSA harmonize the U.S. lithium battery provisions in the HMR with the international dangerous goods regulations, and then work with other nations to assure compliance with that unified set of rules. We would be glad to meet with you to review these issues, if you or your staff would find it helpful. Please contact George Kerchner, Executive Director of PRBA – The Rechargeable Battery Association, at 202.719.4109 or gkerchner@wileyrein.com regarding any follow-up. Thank you. Sincerely, AdvaMed Air Transport Association Association of Home Appliance Manufacturers Cargo Airline Association Consumer Electronics Association. Consumer Electronics Retailers Coalition CTIA – The Wireless Association Dangerous Goods Advisory Council Express Association of America Information Technology Industry Council International Air Transport Association National Association of Manufacturers National Electrical Manufacturers Association National Retail Federation Power Tool Institute PRBA – The Rechargeable Battery Association Retail Industry Leaders Association Saft Security Industry Association SureFire, LLC The International Air Cargo Association 1. Since 1991, PHMSA and the Federal Aviation Administration (FAA) have identified 44 air transport-related incidents involving lithium batteries and devices powered by lithium batteries. Putting aside the fact that there have been untold billions of battery shipments during this time period – yielding an infinitesimal rate of incidents to batteries shipped – the quoted statistic is flawed even for what it purports to support in terms of the proposed rulemaking. For example, 16 of those 44 incidents occurred in the cabins of passenger aircraft or in checked baggage and thus are irrelevant to the present rulemaking. In fact, the proposed rulemaking’s passenger carry-on provisions for lithium batteries are less restrictive than currently authorized under the ICAO Technical Instructions. This is one of several proposed changes to the U.S. lithium battery regulations in HM-224F that are less stringent than similar provisions contained in the ICAO Technical Instructions. In 16 of the 44 incidents, shippers failed to comply with existing regulations. There is no reason to believe that such shippers would comply with even more restrictive regulations as being proposed by PHMSA. A much more appropriate approach to reducing noncompliance by entities that are ignoring existing, far less onerous regulations than proposed would be to harmonize the U.S. lithium battery provisions in the HMR with the international dangerous goods regulations, and then work with other nations to assure compliance with that unified set of rules. Failings by a handful of scofflaws do not justify, and will not be corrected by, excessively regulating the millions of products (e.g., medical devices, DVD players, laptops, cellular phones, cordless power tools, digital still and video cameras) shipped into and around the U.S. every year by reputable companies, without incident. With regard to the remaining 12 incidents - One incident occurred as a result of a U.S. Customs inspector cutting into a box with a knife, accidentally cutting into a battery which then caught fire; One incident that occurred 11 years ago resulted from gross mishandling of a pallet of lithium metal batteries by a cargo employee at LAX causing lithium batteries to dislodge from their packaging. These types of packagings are now prohibited in air transport; Two incidents should not even be included in the chart because they did not relate to “Smoke, Fire, Extreme Heat or Explosion” of lithium batteries. One incident onboard a passenger aircraft was related to a power converter that reportedly heated up while plugged into an aircraft power port. The second incident occurred at security screening where a passenger’s bag containing a computer was reportedly “hot.” The screener had the passenger turn off the computer; and The remaining eight incidents do not have enough information from FAA to determine battery type, cause of incident or whether the failure could have been prevented by the proposed regulations. 2. PHMSA proposes meaningful change without significant costs or hardship to industry. The facts do not support this statement. For example, PRBA – The Rechargeable Battery Association has submitted for the record an unimpeachable study that shows adoption of the proposed rule would impose annual direct costs on the U.S. economy in excess of $1 billion. Similarly, UPS’s carefully and conservatively prepared cost estimates indicate that it will incur first-year costs of $264 million as a result of staffing increases and other process changes needed to accomplish the acceptance of newly regulated shipments, additional handling personnel required to process shipments to maintain new loading restrictions, and additional flights required to compensate for the significant loss of capacity due to the severe restrictions on how these batteries may travel in the air. The proposed rules will not only impose hundreds of millions of dollars of costs on American businesses and consumers, they will disrupt some of the most efficient and time-to-market distribution systems in the world without appreciably contribution to the safety of air transportation. Increasing the cost and complexity of shipping a vast range of consumer electronics products, the proposed rules could have a dramatic impact not just on shippers, but also on manufacturers, distributions, service providers and, ultimately, consumers. For example, today’s wireless business relies on quick, predictable, flexible and scalable deployment of the most innovative devices to keep pace with rapidly evolving consumer demands and intense competition. The proposed rules could dash expectations of consumers and eventually impose the costs of these new regulations upon consumers. Put simply, the proposed rules could alter the underlying business models of a number of different industries. 3. This NPRM simply proposes that lithium batteries join the rest of the hazardous materials that must currently comply with a host of basic regulations including marking and placarding. None of the more than 115 commenters who opposed promulgation of the proposed rule is resisting “basic regulations including marking and placarding.” Industry and other commenters fully support the international lithium battery regulations. These require nearly every package containing a lithium battery or product powered by a lithium battery to be capable of withstanding a 1.2 meter drop test in any orientation without damage to the battery, marked with a lithium battery caution label and accompanied by a shipping document. What the commenting parties are opposing is a separate and more complicated U.S. regulatory scheme, which is at odds with international regulatory requirements throughout the rest of the world. For the record, we also note that “placarding” is generally not required for consignments of lithium batteries, nor is PHMSA proposing “placarding” requirements for lithium batteries in this rulemaking. 4. Crew accessibility on wide-bodied aircraft is defined as the entire upper deck of the aircraft. An area is only considered as “crew accessible” where a crew member actually is able to gain access. Many operators of wide-body aircraft use full-width contoured closed containers on the main deck. This means that only the first container position is accessible. All other containers are not accessible, so the proposed requirement would eliminate approximately 80% of the cargo capacity of a typical 747 freighter aircraft as useable for transporting consumer electronics. It also merits note that use of these full-width containers is fully consistent with cargo compartment classifications set out in FAR 121, which make reference to the characteristics of the cargo compartment and the fire-detection/fire-suppression systems, not crew accessibility capabilities. But such use is not consistent with the June 14, 2010 letter’s assertion. Additionally, the letter is silent with respect to the impacts on single-pilot, small feeder aircraft that service less-populated air locations. For these aircraft, there are no crew accessible locations, which means they will be unable to provide any lithium battery air transport services. A related and important issue ignored in the June 14, 2010 letter is the loss of aircraft capacity that would result if the proposed rule was promulgated, and the cost and other implications of that loss. To understand this issue, one first must recognize – as PHMSA completely failed to do – the immense number of shipments that would be affected by the proposed rule. For example, in the last decade, approximately 18 billion lithium ion cells have been manufactured worldwide and most consumer electronics imported into the U.S. containing these small cells have been shipped by air cargo from Asia, and in many cases more than once. Similarly, in 2009 alone, nearly 340 million notebook computers, cellular phones, and digital still and video cameras packed with or containing lithium ion batteries were shipped to the U.S. The vast majority of these were transported on aircraft. For a commodity as ubiquitous as these electronic devices, removing even 50% of usable aircraft capacity from the international supply chain will create a significant economic impact, resulting in U.S. job losses for air carriers, related transportation providers and distributors. 5. While there are no fire-resistant containers currently on the market, research and development efforts are significantly underway. The assertion that research and development are “significantly underway” for fire-resistant containers that could be used for transporting lithium batteries and products powered by them is inaccurate and potentially misleading. Containers now “under development” do not represent containers which are available and certificated. Once products are developed, they will require assessment, approval and certification by FAA – a process which could take years. As a result, there is no reasonable or verifiable timeframe under which such containers will be available for commercial deployment. Unfortunately, the only certainty is that they will not be available at the time the rule is proposed to go into effect. 6. The U.S. should take this opportunity to emerge as a global leader in hazardous materials transportation and increase the safety standards applied to the safe transportation of lithium batteries. The U.S. already is a leader. The fact that almost all other nations that participate in the ICAO Dangerous Goods Panel have overwhelmingly rejected proposals identical to those contained in PHMSA’s rulemaking does not change this fact of U.S. leadership. However, by promulgating a rule which is so contrary to the underlying risks cited, and so contrary to the regulatory requirements throughout the rest of the world, the U.S. is placed in a negative light for its failure to promulgate reasonable, rational, and workable regulations. The June 14, 2010 letter also incorrectly implies that the U.S. is the only country that requires shippers to implement security plan requirements for certain types of hazardous materials. This is not a requirement unique to the U.S. In fact, the requirements for security plans for shippers of dangerous goods exist in all other international modal regulations, consistent with the requirements set out in the UN Model Regulations. 7. Critics of the NPRM have claimed that it will cost U.S. manufacturing and transportation jobs across America. Again, this is simply not true. If adopted, the proposed rule would put U.S. businesses at a competitive disadvantage in the global marketplace. It is common knowledge that several prominent shippers of portable electronic equipment containing lithium ion batteries have already begun plans for transferring logistics centers to locations outside the U.S. if these rules are promulgated, to enable cross-border ground shipments rather than managing distribution from their current, U.S. locations. Because U.S. carriers do not have the right to transport cargo from one foreign country (such as China) to another (such as Mexico), unless specific permission is granted through bilateral or open skies international agreements between governments, the transport of millions of tons of electronics goods shipped via air cargo would shift from U.S. to foreign flag carriers. Further, as the U.S. works to develop and manufacture the next generation of advanced lithium ion batteries for the domestic automotive sector and other industrial markets (with millions of dollars of Federal government support), regulatory policies concerning the transportation of these batteries must support, not hinder, these important job-creating efforts. PubZone2	A4A advocates measures to support aviation safety, security and well-being.