Commercial Aviation: The Quest for Sustainable and Affordable Alternative Jet Fuel

Transcription

1 Commercial Aviation: The Quest for Sustainable and Affordable Alternative Jet Fuel Steven D. Barker Director, Technical Fuel Services and Standards ACI-NA Joint Technical and Environmental Committee Meeting September 26, 2010

2 Diverse Set of Stakeholders Aligned via CAAFI and Other Coalitions in Quest for Alternative Aviation Fuels Airlines/airports/manufacturers/FAA co-founded Commercial Aviation Alternative Fuels Initiative (CAAFI) in 2006; simply no equivalent (unity/commitment) for other modes of transport Technology- and feedstock-neutral, CAAFI includes universities, FAA Center of Excellence, think tanks, government labs, energy start-ups and major oil companies, bankers; collaborating closely with DOD, DOE, EPA and USDA; results-oriented Secured passage of ASTM D7566 for synthetic fuels; actively working to ensure approvals of HRJ and other pathways Received Joseph S. Murphy Industry Service Award from Air Transport World in Jan in recognition of efforts to pave the way for use of sustainable biofuels in aviation Now forging deeper ties with state and local economic development authorities (e.g., CA, GA, IL, HA, MI, MN, MS, FL, NC, ND, NY, OH, PA, TN, TX, WA) to facilitate projects, along with Sustainable Aviation Fuels Northwest and others 2

3 Quest for Alternative Fuels Aligns with Focus on Enhancing Industry Viability/Competitiveness/Workforce Average fuel expense reached 36% of U.S. passenger airline costs in 3Q08; every penny-per-gallon means $175M-200M/year Aviation has no alternative source of energy susceptible to price shocks, supply disruptions, carbon constraints, etc. No changes needed for airplanes/airports/pipelines Key challenges to widespread commercial/military deployment: Price stability/affordability (largely cost of feedstock) Commercial availability and sustainability of feedstock Financing and construction of processing facilities U.S transportation/agriculture/energy policies are key enablers Economic and environmental aspirations aligned with FAAC mission 3

4 Air Transport Association of North America Founded in 1936 Nation's oldest and largest airline trade association 17 US-Based Airline Members Purpose is to foster a business and regulatory environment Safe and secure air transportation Enables U.S. airlines to flourish Stimulating economic growth locally, nationally and internationally $1.2 trillion in annual economic activity 11 million well-paying American jobs ATA and its members continue to play a vital role in shaping the future of air transportation. 10/4/2010 4

5 Airline Energy Costs Are High and Poised to Rise Average U.S. Price per Gallon of Jet Fuel $2.37 $2.19 $2.34 $1.69 $1.05 $ (EIA-F) 2011 (EIA-F) Source: Energy Information Administration 5

6 Aviation Industry Has Opportunity to Reinvent Supply Chain, Alleviate Dependence on Traditional Refining Economics Gallons total 44.7 due to processing gain Average U.S. Yield From a Barrel of Crude Oil in Propane/Butane/Propylene/Butylene 19.6 Finished Motor Gasoline (including Naphtha*) Light Distillates (52%) 4.1 Kerosene / Jet Fuel Jet Fuel (9%) 11.7 Heating Oil and Diesel Fuel Diesel/Heating Oil (26%) Lubricants/ Waxes/Asphalt/Tar/Fuel Oils Petroleum Coke and Other * Feedstock for high-octane gasoline, petrochemicals and solvents Sources: EIA and American Petroleum Institute Heavy Distillates & Residuum** (13%) ** Includes heavy oils used in industry, marine transportation and electric-power generation 6

7 Alternative Jet Fuel Will Produce Environmental Benefits Local Air Quality and CO 2 Emissions Must Be Considered Local Air Quality (LAQ) Emissions Alternative fuel can help reduce the emissions of pollutants released when jet fuel is combusted, lower the LAQ impact of flight operations e.g., Alternative fuels tend to have lower sulfur content, resulting in lower sulfur and particulate matter (PM) emissions Carbon Dioxide (CO 2 ) Emissions Achieving significant carbon benefit requires environmental improvements across the life cycle of the fuel e.g., Emissions of carbon measured at the tailpipe may not be that different than from traditional fuel, as today s combustion engines need the carbon energy source 7

8 How Can Airlines Derive CO 2 Emissions Benefit? CO 2 Life Cycle Analysis for Jet Fuel Includes: Feedstock generation (e.g., crude oil versus crops) Transportation of feedstocks for processing Processing of feedstocks into jet fuel Distribution/transportation of jet fuel to airports Combustion of jet fuel in the aircraft Opportunities for Benefit with Alternatives Using plants (biomass) as feedstock sequesters carbon in a loop, whereas fossil fuel releases carbon sequestered long, long ago New methods could be used to reduce or sequester emissions when being transported and/or processed Higher energy density could yield small CO 2 decreases upon combustion 8

9 Commercial & Military Aviation in Strategic Alliance DOD Ability to Contribute to Accelerated Deployment Constrained ATA and DLA formed strategic alliance in March to explore cooperative market engagement for fuel, improve the financial prospects for alternative fuels infrastructure, accelerate fuel certification efforts and refine our methodology for determining environmental impacts Seeking to jointly advertise jet fuel requirements in different parts of the country, to supply airports and USAF/USNA installations with competitively priced, environmentally preferred, operationally secure, reliably delivered jet fuel DOD contracting authority limited to 5 years; seeking up to 20 years (supported by ATA) DLA and Pacific Command joined USDA and ATA/Boeing/FAA at July 14 Farm to Fly event 9

10 Commercial Off-Take Agreements Key to Progress ATA/CAAFI Key Facilitators of Airline-Supplier Discussions ATA has facilitated one ground-fuel contract and two jet-fuel MOUs Aug eight U.S. airlines signed 5-year contract with Rentech and ASIG for renewable synthetic diesel made from urban woody waste for use in LAX GSE in late 2012 Dec airlines* from the U.S., Canada, Mexico and Germany announced MOUs with two suppliers supporting two refining processes Rentech (L.A.-based) to produce Fischer-Tropsch jet fuel (250m gal/year) using coal or petroleum coke and biomass, with CO 2 sequestration, at a plant in Natchez, Mississippi AltAir Fuels (Seattle-based) to produce HRJ fuel (50m gal/year) and diesel (20m gal/year) using camelina or other non-food crops (e.g., algae, jatropha) at a West Coast refinery by 2013 Administrator Babbitt: Today s announcements reaffirm the airlines commitment to a greener, more stable and secure energy future, reinforcing the spirit of innovation and openness that is the essence of the Commercial Aviation Alternative Fuels Initiative. July 2010 United Airlines signed MOU with Gevo for a future supply of biobutanol for flights serving Chicago O Hare; other airlines currently evaluating this project and others Aug discussions ongoing with AltAir, Amyris, BioPure Fuels, Byogy, Gevo, JetE, LS9, NextStep Energy, Rentech, Sapphire, Sasol, Solazyme, Solena and many others 10

11 Key Challenges Remain to Commercial Deployment Certification Hydrotreated renewable jet (HRJ) not yet approved by ASTM (est. 1Q11) Additional pathways (e.g., hydrolysis/fermentation, lignocellulosic bioconversion, pyrolysis/liquefaction processes) promising large, environmentally beneficial volumes could take years (and $) to approve Feedstock Readiness Industry working with USDA to enhance commercial quantities of costcompetitive, environmentally sustainable, flight-ready aviation biofuels Affordability Getting facilities built and crops grown is important, but price of resultant fuel must be competitive with market price of jet fuel Multiyear incentives (e.g., biodiesel tax credit, RINs) are critical to enable off-take agreements between airlines and suppliers 11

12 Key Challenges Remain (Cont d) Crediting of Environmental Benefit Airlines typically comingle the fuel they purchase in common-carrier multiproduct pipelines and airport fuel-storage facilities, such that the purchasing airline might not actually fly with the exact fuel it purchases Uncertainty as to whether regulatory structure will accord credit to airline that purchases the more environmentally beneficial fuel Compatibility of International and Domestic Acceptance Criteria Lack of consistent/compatible environmental criteria worldwide for alternative fuels in international aviation could impede deployment Applies not only to compatibility with other countries, but also within the United States (e.g., emerging state programs for low-carbon fuel) 12

13 Alternative Energy Is Inevitable, But Aviation Must Not Be Left Behind The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil. Sheikh Zaki Yamani, former oil minister of Saudi Arabia, Oct. 23,

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