Attended the Commercial Aviation Alternative Fuels Initiative (CAAFI) general meeting last week. They only hold a general meeting once every two years or so. In the last meeting, which I didn’t attend but read about to prepare for this one, everyone had been pretty upbeat that aviation biofuels were finally “operational.” Fast forward two years, and now everyone seemed stuck in the muck with lack of financing and cost concerns. Speakers compared it to a “teenage” industry, where two years ago aviation biofuel was a happy-go-lucky little kid, and now it was a moody teenager with all the awkwardness and insecurity of growing up.
Except for one – AltAir Fuels, the model athlete and academic who others look to for inspiration. AltAir Fuels has achieved financing at a commercial scale, and has current partnerships with the likes of United Airlines (see their press release here) and Honeywell to provide sustainable aviation fuels to LAX. Tom Todaro, the CEO of AltAir Fuels who looks like he probably played football in his youth, took in funding from all sources: private equity, debt, his personal funds (his kids’ college fund, he half-joked), and the Dept. of Energy.
It’s a steep hill to climb for those that want to follow in his steps though. According to the youngish-looking and very enthusiastic CEO of Alaska Airlines Brad Tilden, who showed up in a green tie in support of the Seattle Seahawks, a recent test of a 20% biofuel blend cost him $17/gallon, compared with a typical $3/gallon for traditional jet fuel. To put it into perspective, Alaska Airlines had profits of $380 million in 2013, and fuel expenses of $1 billion. If he were to only use the biofuel blend, fuel would cost him $7 billion per year, obviously not feasible with his current profits. He seemed very excited about biofuels, though, and said, “If you make this viable, we’ll buy it.”
In other news, the Keystone pipeline passed its environmental review. It wasn’t a surprise to me and others in the energy industry. I think there’s a wide gap in the information decision-makers know and the public knows, which makes it easy for the public to vilify the decision-makers or claim that there’s backhand dealing going on. Not to say there isn’t in some issues or may not be, but if the public sat down in Congressional hearings and read some background information they’ll find that energy decisions are made with a remarkable deal of practicality and science.
And I’m not strictly advocating for the Keystone pipeline. However, something that seems to be glossed over in the mainstream media is that there are already a LOT of pipelines like Keystone linking the US and Canada, fully operating and chugging their contents along. Now why wouldn’t Keystone be approved if there’s already all these other pipelines in existence? To peeps in the energy industry, it seems like the public had to find one pipeline to pick on, and they picked the Keystone pipeline.
Issues of climate change and economic prosperity are tricky subjects. Both are pretty important, but they don’t exactly play well together. By developing their oil sands and building their LNG terminals, some argue that Canada pretty much wipes out any climate agenda they have going. But, developing those industries does bring jobs and valuable exports.
I don’t know whether climate change and economic development is an either/or thing, but they sure do ram their heads a lot. Let’s suppose we adhere to a strict climate change agenda, at the loss of moderate economic development. How will our generations 20, 30, 40 years ahead be affected? Now let’s suppose we sacrifice some climate change targets to gain economic development. Again, how will our generations 20, 30, 40 years ahead be affected?
Now I’m going to slip into hazy, future-scoping territory. I venture to suggest that with enough economic prosperity, we can handle our resources and innovate to adapt to a changing environment. The rest of our world – diverse species and habitats – may not do so well. If we stuck with a strict climate change agenda, our diverse species and habitats may be saved to some extent, just from a climate perspective – but there’s already plenty of damage done through other human actions – farming, for example. If we suppressed our carbon emissions by brute force, before we develop economical, advanced technologies that still allow productivity, then we’re just hurting our human productivity. And I don’t think any country would vouch for that, which evidently they haven’t.
So the international consensus has been towards economic development. To keep the earth in balance, however, that requires a concurrent strong support of clean energy technology R&D, which in light of declining investments in cleantech, I don’t know if we’re handling quite adequately.