Power Hungry: Market for Synthetic Aviation Fuels off to a Shaky Start

Article excerpt

Algae, wood chips or garbage could in the future help fuel airplanes.

[ILLUSTRATION OMITTED]

So say U.S. manufacturers of alternative aviation fuel, who are beginning to develop novel ways to power aircraft.

Makers of synthetic fuel are eager to offer their wares to the military as a lower cost and nationally produced alternative to petroleum-based products.

Chief among the potential buyers of synthetic fuel is the Air Force, which has trumpeted an ambitious plan to power its aircraft with alternative propellants.

The service plans to certify its aircraft fleet with synthetics by 2011 and aims to meet half of its fuel needs with such products by 2016.

But Air Force officials face roadblocks that are hampering efforts to stimulate the growth of a fledging synthetic jet fuel market. While the development of alternative energy technology in the United States has exploded in recent years, for synthetic aviation fuels, progress has been much slower.

"The industry is just beginning to grow in the United States," says William Anderson, assistant secretary of the Air Force for installations, environment and logistics.

Rentech and Baard Energy were two of the first companies to announce plans to build synthetic aviation fuel plants. But their sites won't be ready until 2011 and 2012, respectively.

Other countries are far ahead in this area, including South Africa, Malaysia and Qatar. "There are at least a dozen [plants] operating around the world today and another couple of dozen under construction or in the final planning stages," Anderson says at an Air Force energy forum in Arlington, Va.

Anderson estimates that every $10 increase in the price of a barrel of oil costs the Air Force $600 million annually.

Additionally, the development of alternative fuel is considered a national security priority. At the energy forum, Mississippi Gov. Haley Barbour, a staunch alternative energy advocate, claims that the United States is hurting its anti-terrorism campaign by importing foreign oil.

"The United States is financing both sides of the war on terror. We're financing our own military and our own economy, and then a lot of our petrol dollars find their way into the hands of radical Islamic terrorists," says Barbour.

The Air Force hopes to spur the growth of a U.S. synthetic fuels market. But a string of policy headaches may prevent the service from buying the very products it promotes.

A provision included in the 2007 Energy Independence and Security Act that was signed into law by President Bush in December contains language that would prevent the Air Force--or any government agency--from buying synthetic jet fuel unless it is proven to emit less carbon over the life of the substance than currently used petroleum.

The problem is that no one knows how to measure that.

"No one has the ability to capture life cycle costs," Anderson says.

Without life cycle data, manufacturers of alternative fuel have no benchmark to go by, says Paul Bollinger, Anderson's former special assistant.

He says the Air Force was taken off guard by the new requirement, contained in section 526 of the energy act.

"The Air Force always said it wanted a greener fuel than petroleum, but we were focused on the production, which is where most of the carbon dioxide comes from. We weren't talking about the life cycle," Bollinger says.

Chief executive officers of Rentech and Baard assert that their fuels are cleaner than petroleum.

The companies have decided to mix traditional hydrocarbon-based products with biomass--plant matter that can be burned for fuel--in an attempt to reduce harmful emissions.

Rentech plans to build the first U.S. synthetic aviation fuel plant in Natchez, Miss., which will produce a blend derived from petroleum residue called petroleum coke and water sludge, says CEO Hunt Ramsbottom. …