Assessing Opportunities for Alternative Fuel Distribution Programs (2013)

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1 1.1 What Are Alternative Fuels? For the purposes of this guidebook, alternative fuels are defined as fuels that can be used to replace today’s petroleum-based fuels—such as Jet A, diesel, and gasoline—and that have the potential for providing environmental, energy security, and supply reliability benefits. Alternative fuels can be produced with a variety of technologies and from a number of different feedstocks, both renewable and non-renewable. Renewable feedstocks include plant oils, animal fats, and biomass (e.g., crop residues, wood chips, and prairie grasses); non-renewable feedstocks include coal and natural gas. Depending on the feedstock and technology process utilized, alternative fuels have different environmental and economic characteristics. Alternative fuels for use at airports can be divided in two large groups: alternative jet fuels and alternative fuels for surface use. With respect to alternative jet fuels, this guidebook con- siders the two pathways that have been approved for use on aircraft at the time of writing and three other pathways that are being considered for approval for use on aircraft in the short to medium term: • Alternative jet fuels (currently approved): – Fischer-Tropsch (FT) process – Hydroprocessed esters and fatty acids (HEFA) • Alternative jet fuels (expecting approval): – Alcohols to jet (ATJ) – Fermentation renewable jet (FRJ) – Pyrolysis renewable jet (PRJ) With respect to alternative fuels for surface use, there are many different types currently available for use on ground transportation or other surface applications, such as power genera- tion. This guidebook concentrates on those alternative fuels that have the most potential for being utilized in the airport setting. This selection was made based on current maturity of the production technology as well as current or expected uses at airports across the United States, as explained further in the guidebook. The selected alternative fuels for surface use include the following: • Biodiesel blended at 20% with conventional diesel (B20) • Ethanol blended at 85% with conventional gasoline (E85) • Compressed natural gas (CNG) • Liquefied petroleum gas (LPG) • Electricity S e c t i o n 1 Introduction

2 Assessing opportunities for Alternative Fuel Distribution Programs The U.S. Department of Energy (DOE) also considers liquefied hydrogen as a potential alter- native fuel. However, the vehicle technology and refueling infrastructure does not appear to be as advanced as that for the other alternative fuels mentioned. In fact, most hydrogen refueling stations in the United States have been constructed to support demonstration projects (EIA 2011b). Therefore, it is not expected that hydrogen will be adopted for use at airports in the short to medium term and is excluded from this report. 1.2 What Is Driving the Interest in Alternative Fuels? A diverse group of stakeholders—including airports, airlines, the military, federal and local governments, and end users—wants alternative fuels for a series of economic, operational, and environmental reasons. These reasons include the following: • To diversify sources of conventional fuel: Alternative fuels offer the potential to reduce the dependence on petroleum-derived fuels. This is especially important for the air transportation sector because virtually all of the jet fuel currently used in aviation operations is derived from petroleum. Given current technology, there are no practical options to power aircraft engines other than with liquid fuels. For surface applications, alternative fuels offer the chance to shift away from petroleum-based fuels and create a portfolio of options to meet the demands of the transportation and other energy-intensive sectors. • To improve reliability and security of supply: Alternative fuels can incrementally secure the supply of energy for the economy in general and of liquid fuel to the airline industry in particular. The United States is the largest net importer of petroleum. These import sup- plies are subject to disruption because of regional or international conflicts. Major users of petroleum-based fuels, such as U.S. airlines and the military, would like to develop domestic alternatives to lessen the dependence on foreign sources. The production of alternative fuels using feedstocks that are available in the United States can help meet that goal. Furthermore, alternative fuel production facilities need not be located in the same places where conventional refineries are located. This alternative location would allow the geographic diversification of production away from sites prone to natural disasters, such as the U.S. Gulf Coast. • To reduce the volatility of the price of jet fuel: Alternative fuels may contribute to reduc- ing the volatility of the price of fuel. By diversifying the supply of fuel and making fuel less dependent on unstable foreign sources and more immune from the vagaries of financial flows in the futures markets, alternative fuels may lead to less variability in the price of fuel. Furthermore, as the alternative jet fuel industry develops, airlines may have the ability to enter into long-term supply contracts with potential producers that would specify a certain price or price band over time. • To provide regional economic benefits: Alternative fuels have the potential to gene- rate new jobs and spur economic activity, especially in rural areas where feedstocks can be grown. In addition, the growth of a domestic alternative fuels industry would help reduce U.S. imports of foreign crude oil and, thus, those resources that would otherwise be spent abroad could be re-invested domestically. Alternative fuels can also mitigate the economic impact of carbon taxes or other charges under consideration for conventional fuel. • To provide potential environmental benefits: All users of petroleum-based fuels generate carbon dioxide (CO2), nitrogen oxides (NOx), sulfur oxides (SOx), and particulate matter (PM) emissions. The use of alternative fuels can potentially help to reduce emissions of these

introduction 3 pollutants, providing environmental benefits to the airports, their surrounding communities, and the airlines they serve. 1.3 Why Are Airports Interested in Alternative Fuels? Airports can specifically benefit from alternative fuels for the following reasons: • Incremental business opportunities: Alternative fuel distribution facilities offer airports another means of diversifying and augmenting business opportunities. Airports can ben- efit by, for example, leasing land to third parties to develop and manage alternative fuel refueling stations. • Improvements to local air quality: As mentioned in Section 1.2, alternative fuels have the potential to reduce emissions of local air quality pollutants. This is of particular interest to airports that operate in air quality “non-attainment” areas, which means that they are operat- ing or trying to build something in an area where air quality does not conform to federal or state standards of acceptability with respect to various pollutants. • Good citizenship: Airports are vital members of the communities they serve and are impor- tant players in local economies. Airports are already environmentally conscious by, for example, introducing electric-powered vehicles, building more energy-efficient buildings, and modernizing firefighting training facilities. The introduction of alternative fuels offers airports an opportunity to expand their economic and environmental activities and other efforts to create a positive impact. • Serving of their airlines’ needs: Airports may have an opportunity to play an enabling role for sourcing and distributing alternative fuels, in particular, alternative jet fuels to interested airlines. For example, the International Air Transport Association (IATA) has set a target of carbon-neutral growth starting in 2020 and a reduction in CO2 emissions of 50% by 2050 relative to a 2005 baseline (IATA 2009a, 2009b). The availability of alternative fuels will be fundamental for the industry to achieve these targets. Furthermore, the availability of alter- native jet fuel at an airport may attract additional air service from parts of the world that are particularly sensitive to environmental issues. This may lead to incremental business for the airports and contribute to regional economic development. 1.4 What Roles Do Airports Already Play in Fuel Distribution? Airports are currently involved in the distribution and sourcing of conventional fuel. In the case of jet fuel, airports ensure that safety and regulatory requirements of fuel handling and storage are met but are not typically involved with commercial aspects of jet fuel sourcing. The supply of jet fuel at airports is typically the responsibility of airlines that enter into contracts with oil companies, third-party suppliers, or fixed-based operators (FBOs). Furthermore, the jet fuel infrastructure at airports is typically managed and maintained by third-party vendors on behalf of the airports or the airlines. Thus, the sourcing and handling of jet fuel is not usually part of an airport’s core business. With respect to alternative fuels for surface use, there are many different ways in which airports are involved. In some cases, just as with jet fuel, third parties manage refu- eling stations and the fuel distribution facilities. In other cases, the airports themselves have facilities and staff with direct responsibility for sourcing and managing some or all of the fuel.

4 Assessing opportunities for Alternative Fuel Distribution Programs 1.5 What Roles Can Airports Play in Alternative Fuel Programs? There are many opportunities for airports to get involved and be supportive of alternative fuel distribution programs—even for cases in which airports are not expected to be the main program developer. For example, airports can: • Bring together local stakeholders, such as airlines, local fleet owners, fuel producers, feedstock providers, and government entities; • Conduct studies to identify the feasibility of introducing alternative fuels; • Help stakeholders understand program risks and develop business cases; • Include alternative fuels as part of the airport’s sustainability plan; • Provide direct support such as the use of airport property for construction of storage and other infrastructure that may be required; and • Support program funding through the use of bonding capability and assistance with federal or state funding programs. The roles that a specific airport adopts will depend greatly on its specific conditions and governing structure. In general, an airport may consider adopting those roles that support new business development, enhance existing business, foster good citizenship, and support sustain- ability efforts. 1.6 Limitations of This Guidebook The field of alternative fuels, especially alternative jet fuel, is advancing very rapidly. The information contained in this guidebook about the technologies and feedstocks to produce alternative fuels reflects the best knowledge as of the date of writing and are expected to be rel- evant in the short term. New technologies and feedstocks are expected to become available in the medium to long term; however, given the large uncertainties surrounding these developments, it is not practical to attempt to summarize them in this guidebook. In addition, many of the factors addressed in this guidebook are complex and their inter- relationships are also complex. The tools and approach set forth in this guidebook can provide only a basic framework for conducting a preliminary assessment of the viability of introducing alternative fuel programs at an airport. For example, this guidebook cannot be used to determine definitively the greenhouse gas life-cycle emissions or the relative water impacts of any particular fuel produced at any particular facility. This guidebook also cannot be used to determine how potentially competing costs and benefits should be weighed. Ultimately, the critical evaluation of the environmental, economic, social, and institutional impacts of any given program will be complex and likely require the assistance of experts. 1.7 Resources for Further Information The latest information about the development of alternative jet fuels and alternative fuel for ground use can be obtained from a number of resources, including the following: • Alternative Fuels Data Center (http://www.afdc.energy.gov/afdc/), a comprehensive clear- inghouse of information related to advanced transportation technologies provided by the DOE.

introduction 5 • The Sustainable Airport Manual (http://www.airportsgoinggreen.org/SAM) published by the City of Chicago offers insights into best practices and strategies for encouraging alternative fuels in the airport setting. • Clean Cities (http://www1.eere.energy.gov/cleancities/index.html), the DOE’s flagship alter- native transportation deployment initiative. • Airport Cooperative Research Program (http://www.trb.org/ACRP/ACRP.aspx), which supports a portfolio of programs on alternative fuels. • The Commercial Aviation Alternative Fuels Initiative (CAAFI, www.caafi.org), a coalition of U.S. government, manufacturers, airlines, and airport organizations. • Airlines for America (A4A, www.airlines.org), the leading trade association for U.S. airlines. • The International Air Transport Association (www.iata.org), an international airline trade association. • The Air Transport Action Group (ATAG, www.atag.org), an association that represents all sectors of the international air transport industry. • The Sustainable Aviation Fuel Users Group (www.safug.org), a coalition of airlines, manufac- turers, and other organizations involved with alternative jet fuel. • The Midwest Aviation Sustainable Biofuels Initiative (www.masbi.org) and Sustainable Avia- tion Fuels Northwest (www.safn.com), two examples of multi-stakeholder initiatives focused on introducing alternative fuels in specific geographic regions.