As fuel prices rise, biofuels wait for approval

 - April 30, 2011, 4:15 AM

Civil unrest in the Middle East has pushed up the price of jet fuel by more than 30 percent since December. In response, airlines have increased ticket prices, and some have announced they will begin grounding older, less-efficient aircraft types. While no one knows for sure how long this spike in prices will last, it has prompted many in the industry to turn their attention back to the promise of biofuel.

While a 50/50 blend of jet fuel and synthetic paraffinic kerosene derived through the Fischer-Tropsch process was approved for use in 2009 by ASTM International, the governing body that approves the use of fuels, a standard for hydrotreated (or hydroprocessed) renewable jet fuel or HRJ was expected to be certified by the organization late last year. According to Jim Rekoske, vice president and general manager of renewable energy and chemicals at Honeywell subsidiary UOP–which has developed a technology process that will produce HRJ from feedstock oils such as camelina, jatropha and algae–approval for the new standard was delayed several months by the need for additional testing.

Rekoske told AIN those new tests, expected to wrap up by the end of March, were performed at the request of the engine manufacturers. Once the tests are complete, the results will be evaluated and presented to ASTM’s approval subcommittee for review before moving to the organization’s full committee. “We’re confident that by June there will be a certification vote and we will be successful in certifying the hydro-treated renewable jet fuel,” said Rekoske.

Once that is accomplished, a significant hurdle in the path toward full commercial HRJ production will have been cleared. UOP, which in partnership with feedstock oil provider Solazyme has supplied hundreds of thousands of gallons of HRJ to the military and commercial carriers for testing, had expected to have licensed its technology to prospective producers by this juncture. “Certification is a precursor for somebody being able to obtain the necessary financing to get a biojet [fuel] facility up and operating,” said Rekoske. “We have customers who have plans in place waiting for that final approval, but I’m sure you can imagine that it’s difficult for somebody to loan them money to make a product that is not approved for use.”

Demand from Airlines and the Military

Once that approval is announced, industry experts expect an explosion of announcements from the airlines in terms of long-term off-take agreements: commitments to buy certain volumes of fuel from potential producers. The airlines are also said to be weighing the possibility of other forms of financing to help jump-start these new technologies. That may force airlines to think creatively about how they can foster the industry and create an advantage for a first player, according to Jim Lane, editor and publisher of industry observer Biofuels Digest. “[They need] enough of an advantage that it’s worth someone’s risk to move into the market in a big way, and how they are going to do that they are looking at right now.”

UOP expects a fully functioning plant to be operational two years after it announces the licensing of its technology, provided funding is available. But it might still be some time before production reaches a relevant scale. “Even one facility up and operating will not make a dent in the overall quantity of jet fuel that’s consumed,” said Rekoske. “One facility will probably produce on the order of 70 to 100 million gallons a year. A typical top-20 airport uses 200 million gallons of jet fuel a year, so it’s not even enough to supply one of the top-20 airports.”

Rekoske takes an incremental view toward the industry expansion, believing that as more plants come online, HRJ will eventually make an impact in the availability and cost of jet fuel.  “[The situation in] Libya has taken one percent of the world’s oil off the market and the price of oil has increased by $20 to $25 a barrel within a month-and-a-half, so if we could supply just one percent of the jet fuel, that could make a significant dent in the overall cost of supplying jet fuel because it offers another competitive alternative.”

While the airlines will consume a large portion of initial biofuel production, another major competitor for HRJ output will be the U.S. military, which last month took another step forward in its plan to fill a large percentage of its aviation fuel needs through alternative-fuel blends. On March 18, the U.S. Air Force flew an F-22 Raptor on a 50-50 blend of JP-8 and biofuel derived from camelina oil. During the test the fighter entered supercruise, or supersonic flight without the use of afterburners, at 40,000 feet. Jeff Braun, director of the alternative fuels certification division at Wright Patterson AFB’s Aeronautical Systems Center, reported the F-22 “performed flawlessly on the biofuel blend,” and he saw no noticeable differences from traditional JP-8. In February the service certified its fleet of C-17 Globemaster III cargo haulers for unrestricted flight operations using the fuel blend.

How soon such biofuels could filter down to the business aviation sector is a matter of debate, given the thirsts of the airlines and military. As production starts to ramp up, it might still take a number of years before there is excess production available, and how soon general aviation aircraft might be flying on renewable energy blends depends upon how aggressively general aviation fuel providers wish to pursue it. “It’s not going to be this enormous pool of energy everywhere that we are used to seeing with traditional fossil-based jet fuels,” said Lane. “It won’t be that way for a while. It’s really up to the companies that are providing fuel into this sector to line up an off-take agreement so they’ll have the fuel, and if they don’t, they won’t.”