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Americans are getting used to burning ethanol in their daily commute. Now, pond scum and french-fry grease could help fuel their next business trip, according to the Wall Street Journal.

The report said Americans are used to pouring corn into the gas tanks of their cars, now United and Alaska airlines are gassing up a limited number of flights with algae and cooking oil.

This week, United Airlines flew from Houston to Chicago with a 40% blend of biofuel made from algae—the first biofuel-powered commercial flight in the US. On Wednesday, Alaska Airlines launches the first of 75 flights powered by a 20% biofuel blend made from used cooking oil.

Scientists in recent years have figured out how to make jet fuel from animal fat, garbage, shrubbery and dozens of other substances. But as the new fuels make their way from the lab to 30,000 feet, the economics are proving tricky.

“This is expensive. It’s about six times what we normally pay for fuel,” said Bill Ayer, chairman and CEO of Alaska Airlines. “So the hope is as this industry develops, and it becomes scalable, the price comes down.”

Airlines are eager to fly on fuel that can reduce carbon emissions up to 80% while diversifying the supply of their biggest expense. The price of jet fuel has jumped 87% since 2009 to $3.11 a gallon. But because of small-scale production, renewable jet fuel costs even more.

“The capability’s there,” said chemist Jose Olivares, executive director of the National Alliance for Advanced Biofuels and Bio-products, a consortium of private companies, universities and laboratories. “Whether we can do it economically and at the same price of petroleum fuels, that’s the challenge.”

Seattle-based Alaska Air Group Inc., parent of Alaska Airlines, bought 28,000 gallons of biofuel—at US$17 per gallon—from Dynamic Fuels in Geismar, La., a joint venture of Tyson Foods Inc. and synthetic-fuel company Syntroleum Corp.

Dynamic mostly makes renewable diesel out of inedible animal parts from Tyson’s factories and used cooking oil, some from area restaurants. But its renewable jet fuel—which must be able to withstand more extreme temperatures than diesel or gasoline—is made only as ordered, and the plant won’t ramp up production until there’s demand to match.

“Before we commit the capital, we’ve got to understand that the economics support it—versus build it and they will come,” said Bob Ames, Tyson’s vice president of renewable energy.

In the near term, Alaska Air has no plans of going beyond the pilot project. “It’s not feasible economically,” Ayer said. “But we sure hope this adds to the enthusiasm in this fledgling industry.”

Close.Cash-strapped airlines are dipping a toe into the market, signing nonbinding agreements with providers to buy a total of more than one billion gallons of biofuel in the future, according to companies in both industries.

United, a unit of United Continental Holdings Inc., promised to buy 20 million gallons of biofuel a year starting in 2014, or 0.6% of the airline’s 2010 fuel consumption, from Solazyme Inc., the San Francisco-based company that grew the algae for United’s biofuel flight on Monday. The airline stipulated the biofuel must reduce carbon emissions by at least 50% and be “cost competitive.”

“We’re not in a position to afford paying a premium for jet fuel,” said Jimmy Samartzis, United’s global sustainability director.

Airlines are depending on a $510 million investment from the US departments of Agriculture, Energy and the Navy to jump-start biofuel production to a commercial scale. The program aims to fund new biofuel plants and create a ready market—the Navy’s vehicles and aircraft—for renewable diesel and jet fuel. It will start doling out grants next year.

At least seven international airlines have flown commercial flights using biofuel, including Germany’s Deutsche Lufthansa AG, which in July began flying passengers eight times a day between Hamburg and Frankfurt using a 50% biofuel blend in one of two engines on the plane.

Because biofuel can be made from such an array of sources, industry leaders envision a regional supply chain where local feedstocks—such as the camelina plant in the Pacific Northwest and sugar cane in Brazil—are used to make the fuel for nearby airports. The system would cut transportation costs and carbon emissions, and better distribute the industry’s economic benefits.

More at Wall Street Journal


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