Renewable Jet Fuel:  Why Everything Is So Up In The Air, A View from the Cockpit

June 9, 2016 |

Jonathan LewisBy Jonathan Lewis, Lee Enterprises Consulting

Special to The Digest

Having flown the “heavy iron” for more than thirty (30) years, I can state with full confidence that there are only three (3) very important questions pilots have about Jet Fuel:

#1. Is it good quality fuel?

#2. Do we have enough?

#3. How much does it weigh?

Everything else is more or less superfluous. But on any given day, passengers in the back can pick up a newspaper and read about yet another airline testing yet another renewable jet fuel produced by yet another process. The obvious question is thus, “If all of these renewable jet fuels and production processes are so great, how come the worlds’ airlines aren’t all using them to power their aircraft all the time?” After all, renewable jet fuel (RJ) is much better for the environment, provides for fuel/energy security and is actually a better fuel than petrojet.*

The answer is deceptively simple: Like the 1st Generation biofuels of the past, RJ is a biofuel of the future, whose time has not quite arrived, but is surely enroute and just around the proverbial corner. The underlying reasons for this can be attributed to not only current market conditions, but to supply and logistics issues as well.

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The Current Marketplace and Everyday Issues

IATA reports that the [27 May, 2016] [average NA] Jet Fuel Price is USD $1.41 per gallon. Using the US Dept. of Transportation’s Bureau of Transportation Statistics as the source, it can be seen that last May (May, 2015) major US carriers used over 1.4 Billion gallons at an average cost of $2.08/gallon for a total fuel bill of overt $2.979 Billion dollars. This May, as jet fuel is at $1.41/gallon (and using the same consumption amount), the fuel bill would be about $2.019 Billion dollars, or less than 70% of last year’s bill. In fact (using these figures), a mere $0.01/gallon price increase equals more than a $14,000,000 (Fourteen Million Dollars) increase per month, almost $172 million/year. So airlines’ extreme sensitivity and vulnerability to price and price fluctuations are very obvious.

Looking at the current market price of renewable fuel feedstock immediately reveals another problem for both the RJ producer as well as the consumer: In today’s marketplace, the feedstock costs more than the finished petrojet product. For example, the current price of Yellow Grease is $0.27/pound or about $1.76/gallon, before processing. The finished price of the RJ will easily exceed $2.00/gallon, FOB. Even if the bio-refinery were at the airport, the airlines would pay more than last year’s price.

Of course, we all know that oil prices will rise sooner or later. But then, feedstock prices have the uncanny habit of mirroring petroleum marketplace price variations. So they can be expected to rise with oil prices and especially distillates.

Supply

The first misconception about Renewable Jet Fuel is the idea of a “drop-in” replacement: No drop-in replacement can be used as such because of the simple fact that it is illegal. All renewable jet fuels MUST be blended with petrojet (up to 50/50) by law.

Realistically speaking, that law is not likely to change in the near future for technical reasons: The simple fact is that as big and powerful as modern turbofan engines are, they are very delicate, highly balanced and precisely engineered, multi-million dollar pieces of technology and are very sensitive to things like deposits on the turbine blades. A small fuel residue deposit on a blade spinning at thousands of RPMs can easily throw the wheel out of balance, turning the engine into a bomb with incredible destructive force. With hundreds of lives at stake and hundreds of millions of dollars on the line for a modern jumbo-jet, no airline wants to take that chance and no engine warranty will cover non-certified fuel.

renewable jet 1

Furthermore, (using the previous figures (1.4 Billion gallons of jet in May, 2015), it can be seen that even a mere 10% blend would necessitate 140,000,000 gallons of Renewable Jet [just for May]. This kind of production capacity simply doesn’t exist yet, at least in existing biorefineries. And the economic implications are even more enlightening:

At a blend percentage of [only] 10% RJ/ 90% petrojet, the costs would resemble the following:

Renewable Jet Fuel Cost= Petrojet Price + Production credit + RIN (no processing cost) = $3.53/USG

Petrojet = $1.41/USG

90% X 1.4 Billion = 1,260,000,000 X $1.41 = $1,776,600,000

10% X 1.4 Billion =     140,000,000 X $3.53 =$     494,200,000

=$ 2,270,800,000

By comparison, the same calculation would have been only $1.974 Billion using pure petrojet, or a savings of $296,800,000, just in May alone.

Logistics

Assuming the 140 million gallons could be produced, where would it be blended, where and how would it be stored and how would it get to the airport?

Using the Houston Intercontinental Airport as an example can be quite illuminating with respect to the logistics problems that must be overcome: There are at least seven (7) non-stop flights to Europe every day with an average flight time of about 10.5 hours. But we also need to add in reserve fuel and alternate destination fuel, say, another two (2) hours for each aircraft, for a total of 12.5 hours of fuel per aircraft. Assuming each route is serviced by an aircraft burning 3,000 gallons per hour (GPH), the following fuel requirements must be met:

Per aircraft: 3,000 GPH X 12.5 hours = 37,500 USG

7 aircraft X 37,500 USG/day                                     262,500 USG/day (RJ Blend)

Most biorefineries are not near pipelines and probably couldn’t obtain pipeline access even if they were because of popularly held misconceptions about RJ molecules and the necessity of blending the RJ with petrojet, either in the pipeline or at the destination airport tank (thus “contaminating” the petrojet fuel supply). In fact, one of our biggest problems was the necessity of isolating the RJ Blend from the rest of the community petrojet at the airport.

And if it is isolated, how does it get from its tank to the aircraft? Most airport fuel supplies are hermetically sealed from the outside: The jet fuel is pumped from the tank farm to the tarmac via an underground hydrant system and uplifted by pumper trucks to the aircraft in its parking place.

Furthermore, non-airport tanker trucks are not allowed on the airport proper for obvious security reasons. And even if they were, it would require 44 tanker trucks to supply the 262.500 gallons necessary, each day. Rail cars are hardly a better solution as it would require a bare minimum of 9 tanker cars, each day, assuming rail access and not counting the security nightmare.

It can be seen that not only are there a number of major issues to be dealt with before RJ ever makes it to the aircraft fuel tank, but the economics appear to be unattractive as well. Or are they?

More on the economics

All RJ fuels are directly dependent upon the feedstock price as well as the processing costs, of course. And in the case of F-T and HEFA fuels, the processing carries a heavy hydrogen cost as well. Furthermore, F-T catalysts are notoriously expensive and short-lived. The one saving grace for F-T RJ is its feedstock flexibility, allowing for lower-priced feedstocks to be used. But overall, it is difficult to locate an F-T RJ below USD $8.00/gallon. And most are priced around $12/gallon. Obviously, this is not viable for an airline.

HEFA processing begins with an “organic” oil of one kind or another: tallow, soybean oil, yellow grease, etc. Yellow Grease is probably one of the least expensive feedstocks available on the market today. In fact, the 27 May, 2016 price was USD $0.27/pound, or $1.76/gallon. If the H2 cost is added in, it is clear that the production costs will exceed $2.50/gallon, at a minimum. Again, this is not competitive with the current cost of petro-jet.

Therefore, not including the environmental benefits, beyond publicity and goodwill purposes, it would be extremely counter-productive for an airline to buy either F-T or HEFA fuels, and therefore, no reason for a Biorefinery to produce them. This is especially true because the market price of Renewable Diesel is more than that of RJ and it costs less to produce.

Alcohol To Jet Fuel (ATJ)

The approved ASTM D-7566 ATJ pathway produces Butanol (BuOH) from Ethanol (EtOH) via fermentation and subsequently dehydrates the BuOH to C2 –C5 olefins, then oligomerizes the olefins to C8 –C16 iso-olefins, then hydrotreats them and finally, fractionates the resulting product to RJ. In the first step (EtOH fermentation → BuOH), there is a maximum efficiency of around 20%. Therefore, for every metric tonne (335+ gallons) of EtOH input, the maximum output of butanol, the ATJ precursor, will not exceed about 67 gallons.

At today’s price of $1.70/gallon, this means that about 268 gallons ($455) is lost before any RJ is even produced. For the Biorefinery, as a metric tonne of EtOH is worth $570 at today’s pricing, this is a significant loss in real money and not just a paper figure. And in the best case scenario, the 67 gallons must be priced at least above the MT price of EtOH to make up for the loss. Thus, a gallon of ATJ cannot cost less than $8.50, even before adding in the rest of the processing costs. While in the US, these costs are somewhat mitigated by credits for biofuels, in most of the world, for most airlines, this is simply not viable.   And in Europe, this would be suicidal for an airline.

RJ Fuel Benefits and Little Known Facts

Of course, the major benefit of RJ is that is much better for the environment than petrojet. By definition, it is carbon neutral and in some cases, maybe even carbon negative insofar as the original processing may have involved a decarboxylation step, thus removing even more carbon from the renewable fuel [to be].

What may be equally interesting for the prospective airline consumer is somewhat more esoteric:

RJ (at least HEFA & F-T RJ’s) weigh less and have more energy per mass than petrojet.

What does this mean in practical terms?  The last RJ we helped develop and tested at Gulf Hydrocarbon yielded the following specs:

Density: 780 Kg/m³ (2.95 Kg/gallon); Heat of Combustion: 46.49 MJ/Kg (15.9 MJ/gallon)

Petrojet has the following specs:

[Average] Density: 807.5 Kg/m³ (3.05 Kg/gallon); Heat of Combustion: 42.8 MJ/Kg (14.03 MJ/gallon)

It can be seen immediately that RJ weighs less per gallon, but has more energy per gallon.  So our flight to Europe will need the following if we are using petrojet:

Energy: 37,500 gallons X 14.04 MJ = 526,125 MJ, and the fuel will weigh 114,375 Kg.

But if we could use 100% RJ, the fuel requirements would look very different. Not as much fuel is needed because each gallon has so much more energy and, the fuel weighs less per gallon:

525,125 MJ/15.9 MJ = 33,027 gallons and 33,027 X 2.95 Kg/gallon = 97, 430 Kg, a difference of almost 17,000 (seventeen thousand) Kg.

The least expensive rate I could find on any airline for air cargo was USD $1.08/Kg. Thus, assuming our flight loaded up with the weight savings in cargo, this would bring an additional revenue of $18,360. If the flight took that cargo every day, this would mean additional revenues of $6,701,140/year (for just that flight). Obviously, if the practice were to spread to say, 100 aircraft, this could mean additional revenues in excess of $670 million/year.

It must also be remembered that not only did the aircraft use 4,473 gallons less fuel for the flight, if we could replace all of the fuel with RJ, the fuel used for the flight would have been carbon neutral. What this means in hard numbers can be illustrated from data released by the US Energy Information Administration: Every gallon of petrojet combusted releases 9.57 Kg of CO2. So 37,500 USG X 9.57 = 358,875 Kg of CO2 (or almost 359 metric tonnes of CO2, just for that flight). The benefits of RJ utilization for the environment are simply too big to be ignored. In fact, the publicity value of those benefits are too big to be ignored….

Economics

With all of the benefits just discussed, there is still the “price issue”. Or is there? Actually, the RIN Credit (of about $1.64/gallon, today) and the Blend Credit (of $1.00/gallon) would be added to the selling price and passed on to the ultimate consumer. In the real world, however, we know that the RJ will cost about $2.50/gallon to produce at current feedstock prices. But, subtracting the $2.64/gallon in credits from the price leaves a net production cost of -$0.14/gallon. So a very interesting solution might be a third party arrangement that leases or buys a refinery (especially one with a hydrotreater) and produces the RJ for the airline or business. In effect, not only would the net fuel cost be less than zero, it would be like being paid an additional $0.14/gallon for every gallon produced, sold and used.   In the Houston area, this would also probably facilitate pipeline access. And even if the Blend Credit goes away (yet again), the net RJ production cost would still be only $0.86/gallon [today] with the RIN credit. And if the airline uses diesel vehicles, the refinery could also produce Renewable Diesel while reaping similar benefits.

Of course, the fuels would need to be approved and certified for service. At Lee Enterprises, we can not only provide innovative solutions for airlines and/or businesses seeking a viable RJ utilization program, but also help with EPA registration and ASTM D-7566 compliance. Not only do our experts have extensive and practical renewable fuels backgrounds, we also have engineers and former airline personnel with hard, real-world experience. Our consultants offer realistic alternatives and options that are not only good for the environment, but beneficial for the bottom line and public image also.

About the author

Jonathan Lewis has a B.S. in Physics and Engineering from Deree-Pierce University in Athens (Greece) and forty years of international flying experience. He has more than 17,000 hours of Pilot-in-Command, heavy, multi-engine turbine time (Jumbo-jet experience, including the Boeing B-747-200F).  He has participated in the development of Renewable Jet Fuels and is one of the discoverers of the benefits of a new Renewable Jet fuel with heavier carbon molecules.  Jonathan has extensive logistics experience and has helped deploy biofuels both nationally and internationally. He has also helped to launch new biofuels like renewable methanol from renewable natural gas and is an active proponent of 3rd/4th generation biofuels technology.  He is actively involved in development of cellulosic diesel technologies and works as a consultant for Lee Enterprises Consulting in France.

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