There have been several innovations in the field of alternative energy sources that have the potential to reduce our dependence on conventional fossil fuels, thereby reducing rising greenhouse emissions.
Biofuel is one such alternative that is gaining popularity worldwide and receiving significant investment. Last week, a biofuel company called Fulcrum BioEnergy announced a $30 million deal with United Airlines to produce a bio jet fuel that is made entirely from the household garbage. Fulcrum BioEnergy is building its own factory in Nevada, near the location Tesla’s future gigafactory, and its production is slated to begin by the end of 2017.
Why is United Airlines investing such a substantial amount in Fulcrum BioEnergy?
The current global slump in oil prices has impacted the biofuel industry, as most biofuels can compete with conventional fossil fuels only when oil prices are above $70 per barrel.
In spite of high production costs, the airline industry is still upbeat on biofuels as they seek an alternative for conventional aviation fuel. In addition, the Environmental Protection Agency (EPA) has issued new draft rules for the airline industry on reducing their carbon emissions.
To me these regulations and to ensure future fuel supplies as a hedge against volatile oil prices, United Airlines chose to invest in Fulcrum Bioenergy. Fulcrum already received investments from Cathay Pacific in 2014 for an initial supply of around 375 million gallons of aviation biofuel over 10 years. United Airlines also struck a 3-year deal in 2013 to buy 15 million gallons of biofuel (made from agricultural waste) from AltAir Fuels.
“The Fulcrum announcement is a big deal precisely because of the need for low carbon solutions for aviation, other companies have made fats and vegetable oils into aviation fuels, but what is important about the Fulcrum technology is the ability to make fuel from wastes like ordinary garbage rather than food resources,” said Jeremy Martin of Union of Concerned Scientists in a statement given to ThinkProgress. Related: When Can We Expect The Next Oil Shock?
Fulcrum would be putting United Airline’s money into setting up five biofuel plants that would produce close to 180 million gallons of biofuel per year. Out of this, United Airlines would be buying around 90 million gallons at a competitive price. Since Fulcrum has long-term municipal solid waste (MSW) contracts with Waste Connections (WCN) and Waste Management (WM) for acquiring the raw material, its cost of producing an alternative biofuel would be as low as $1 per gallon.
Process for preparing the Fulcrum Fuel
The current price for conventional jet fuel is around $1.76 per gallon, which would make the Fulcrum alternative biofuel highly competitive and promising. Fulcrum further claims that its alternative fuel can cut airline emissions by 80 percent.
Can Fulcrum fuel really cut airline emissions so drastically?
Fulcrum BioEnergy is using licensed technology from ThermoChem Recovery International to convert its feedstock into a synthetic gas. In a quick conversion process, synthetic gas is further converted into a jet fuel (figure above). Last year, Fulcrum successfully demonstrated its waste to fuel process and was approved by authorities including the U.S. Department of Defense and the U.S. Department of Agriculture. Related: OPEC Still Holds All The Cards In Oil Price Game
However, we need to look at overall aviation industry to get a larger picture. In 2014, United Airlines consumed close to 3.9 billion gallons of conventional jet fuel, meaning the latest deal for 90 million gallons is a drop in the bucket for the airline’s fuel use. Fulcrum’s alternative biofuel might take at least couple of decades to gain global acceptance and thereby reduce airline emissions in a substantial way.
In 2013, the world pumped out close to 40 billion tons of CO2 by burning fossil fuels. The aviation sector contributed around 3 percent of total global emissions, equivalent to about 1.2 billion tons of CO2.
If successful by end of 2017, Fulcrum’s alternative fuel has the potential to reduce at least 500 million tons of CO2 emissions over the next few years. It is important to note that by the year 2050, around 15 percent of total CO 2 emissions would directly come from the aviation industry.
Global CO2 emissions by sector
'Sustainable Aviation CO2 Roadmap', December 2008
Does this development pose any threat for the oil industry?
With long-term deals from United Airlines and Cathay Pacific, Fulcrum is looking to set up more plants in North America, thereby increasing its capacity to produce close to 300 million gallons of alternate biofuel annually. Related: Dodging The Export Ban: U.S Condensates Export Flourishes
However, it remains to be seen if and when Fulcrum BioEnergy will succeed in commercializing its technology. Its first plant in Nevada would start producing biofuel by end of 2017 only if everything goes according to Fulcrum’s schedule and plans, the remaining plants (through United’s funding) would be built in a time frame of 5 to 7 years, under normal business conditions.
Moreover, the Nevada plant would initially produce just 10 million gallons of biofuel. The long-term supply deals of United Airlines and Cathay Pacific with Fulcrum BioEnergy would therefore take several years to materialize. As of now, the oil industry has little to worry from the Fulcrum fuel.
However, someday the possibility of economically generating alternate fuel from our household garbage could be mainstream.
By Gaurav Agnihotri Of Oilprice.com
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