Assessing Opportunities for Alternative Fuel Distribution Programs (2013)

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6This section discusses the main characteristics of the alternative fuels considered in this study: • Status of technology • Infrastructure and equipment requirements • Potential environmental benefits • Conditions under which alternative fuels are cost competitive • Potential challenges • Potential user groups Each characteristic is covered to some extent within Sections 2.1 through 2.4. Potential user groups and an overview of the current status of fueling infrastructure for alternative fuels in the United States are discussed in more detail in Sections 2.5 and 2.6, respectively. 2.1 Alternative Jet Fuels The emphasis of Section 2.1 is on the two pathways for alternative jet fuel that have been approved for use on aircraft at the time of writing, namely FT and HEFA. A significant por- tion of this information is taken from a previous study, documented in ACRP Report 60: Guidelines for Integrating Alternative Jet Fuel into the Airport Setting (Miller et al. 2011). Readers interested in in-depth information regarding alternative jet fuels are encouraged to consult this report. Alternative jet fuels include those fuels from non-petroleum sources that are approved for use on aircraft. These fuels meet the specifications established by standard-setting organi- zations such as ASTM International (ASTM) and the United Kingdom’s Defense Ministry (DEFSTAN). The certification requirements for these fuels are specified in ASTM D7566, Standard Specification for Aviation Turbine Fuel Containing Synthesized Hydrocarbons (ASTM 2011); guidance is also provided by the Federal Aviation Administration (FAA 2010a). Once the fuel is certified, it is considered to meet ASTM D1655, Standard Specification for Aviation Turbine Fuels (ASTM 2010), which is the specification that applies to conventional jet fuel made from crude oil. Alternative jet fuels can be made from many different sources or feedstocks including coal, natural gas, municipal solid waste, plant oils, and animal fats. The technology for producing alternative jet fuel is evolving rapidly in response to market and regulatory pressures. Currently, there are only two processes for producing alternative jet fuels that have been certified by ASTM: FT and HEFA (described in Sections 2.1.1 and 2.1.2). In addition to FT and HEFA, researchers are pursuing other options for converting plant- or animal-based carbon into jet fuel. These S e c t i o n 2 What Are the Main Characteristics of Alternative Fuels?

What Are the Main characteristics of Alternative Fuels? 7 initiatives include using new feedstocks such as algae and municipal solid waste, using carbon monoxide from the production of iron, and converting sugars into jet fuel. These pathways are discussed in Section 2.2. Are alternative jet fuels compatible with existing fuel delivery infrastructure? A significant advantage of alternative jet fuel is that it is a “drop-in” fuel. A drop-in fuel in this context is a fuel that is found to have performance characteristics and chemical compositions essentially identical to conventional fuel (Miller et al. 2011). For example, once an alternative fuel is certified as an ASTM D1655 fuel (ASTM 2010), it can be distributed, handled, stored, and used without modifications to existing infrastructure or equipment. What are the blending requirements for alternative jet fuels? The ASTM D7566 specification requires that alternative jet fuels produced through the FT or HEFA process be blended with conventional jet fuel up to a maximum 50:50 ratio. FT and HEFA jet fuels lack some compounds present in conventional jet fuel, such as aromatics, which are needed for the safe operation of aircraft engines. Blending these fuels with conventional jet fuel ensures the presence of the required compounds. While blending is not a difficult process, it requires some planning as conventional fuel must be procured and available for blending prior to certification. Some of the new processes for producing alternative jet fuel under investigation have the potential to meet the ASTM specification without the need of being blended with conventional jet fuel. Once these fuels are certified for use on aircraft, the blending requirement will not apply to them. 2.1.1 Fischer-Tropsch Process The FT process has been successfully used by SASOL in South Africa to convert coal to gaso- line, diesel, and jet fuel for many years (Roets 2009). It was certified for use in U.S. commercial operations by ASTM in August 2009. FT can use most carbon-rich feedstocks and is best known for converting coal, natural gas, and municipal waste into a wide range of fuels. The commercially proven FT technologies typically require multibillion-dollar facilities and use coal and natural gas as feedstocks. New developing technologies may use a variation of the FT process that holds the promise of cost effectiveness on a much smaller scale. These more modest capital costs are essential to jet fuel production facilities being able to use municipal waste such as is been proposed for a number of alternative jet fuel programs that are in the plan- ning stage in Australia, the United States, and the United Kingdom. The FT process produces a number of co-products (gasoline, diesel fuel, jet fuel, naphtha) plus heat, which can be used to produce electricity. The typical product distribution of an FT production run is approximately 30% gasoline, 40% jet fuel, 16% diesel, and 14% fuel oil (IATA 2009b). What is the status of the technology behind the FT process? FT production technology is well understood and has been proven on a commercial scale by several major companies, including SASOL and Shell Oil Company. The new small-scale technologies are developmental.

8 Assessing opportunities for Alternative Fuel Distribution Programs What new infrastructure and equipment will be required to store and distribute alternative jet fuels manufactured by the FT process? No changes to existing (1) storage and distribution infrastructure at the airport or (2) equipment, including aircraft and engines, are required, because, once blended, the fuel is drop-in. What are the potential environmental considerations of utilizing the FT process to manufacture alternative jet fuels? FT fuels are chemically very similar to their petroleum equivalents; however, the low sulfur contents are likely to result in lower secondary PM emissions as well as sulfur emissions (e.g., SOx). NOx emissions are more dependent on the temperature at which the fuel is burned and not the fuel formulation itself; therefore, they are unlikely to be affected. The savings in terms of life-cycle greenhouse gas (GHG) emissions depend heavily on the feedstock. For example, coal and natural gas without carbon capture are likely to have higher GHG emissions than conventional jet fuel from petroleum, whereas switchgrass to fuel could result in significant reductions in GHG (Stratton et al. 2010). In the case of municipal solid waste, the content of the waste stream (plastics vs. paper, for example) influences GHG savings. Computation of life-cycle GHG savings is complex and depends on the particular circumstances. For example, the transportation of feedstocks generates GHG emissions, so one facility properly sited may experience a decline in GHG while an identical but remote facility may experience a net increase. For a more detailed discussion of life-cycle GHG emissions estimation, please consult Stratton et al. (2010) or Miller et al. (2011). FT’s water impact is driven primarily by the feedstock. Although cooling in FT uses more water relative to traditional oil and gas refining, this water is largely recaptured, which reduces net impact. Therefore, the relative water impact is driven by the feedstock. Conventional natu- ral gas feedstock uses less water than any other transportation fuel (DOE 2006). However, the potential water consumption and pollution impact of natural gas extracted by relatively recently commercialized hydraulic fracturing of shale is the subject of debate and uncertain. Agricultural feedstocks are much more water consumptive than hydrocarbon-based feedstocks. Therefore, producers of FT alternative feedstocks that use water directly or indirectly (e.g., in the form of agricultural waste) will have a higher impact on the water cycle than producers of hydrocarbon-based FT feedstocks. Under what conditions is the FT process cost competitive? FT is competitive when the price of the feedstock, relative to the energy content, is signifi- cantly less than that of a barrel of oil. Price anomalies occur where feedstocks have limited uses or its supply exceeds its demand. Municipal solid waste is a feedstock that has limited alternative uses, and, in the United States, the supply of natural gas exceeds the current demand. Other conditions under which FT is cost competitive include the following: • Presence of feedstock suppliers willing to provide a long-term contract that covers volume and price • High demand for co-products, such as green diesel or green naphtha • Availability of low-cost financing • Governmental tax credits available for fuel produced from the proposed feedstock

What Are the Main characteristics of Alternative Fuels? 9 What challenges are associated with utilizing the FT process to manufacture alternative jet fuels? Some challenges associated with FT include the following: • Current commercial-scale FT plants are very expensive, on the order of billions of U.S. dollars. • Production economics depend on continual availability of very cheap feedstock. • Environmental benefits are heavily dependent on the feedstock (see discussion above). • Water impact is heavily dependent on the feedstock (see the discussion on the water-energy- food nexus in Section 5.5.3.2). Who are the potential users of FT alternative jet fuels and co-products? Because the FT process produces a range of products (e.g., green diesel, jet fuel, naphtha), the potential users are diverse: • Commercial airlines, military aircraft, and general aviation will use alternative jet fuel. • Surface transportation will use green diesel (i.e., diesel produced from feedstocks other than conventional petroleum; see Section 2.4.1 for more information), for example, taxis, cargo trucks, buses, and rail. • Airport ground support equipment will use green diesel. • Airport facilities or rail/light rail mass transportation will use excess heat and electricity generated by the FT process. A more detailed discussion regarding potential user groups, their motivations, and their willingness to pay to use alternative fuels is provided in Section 2.5. 2.1.2 Hydroprocessed Esters and Fatty Acids Process The HEFA process converts fatty acids that originate from either plants or animals into a com- bination of jet fuel, diesel, and naphtha. HEFA jet fuel is becoming increasingly available and is currently being used in limited commercial operations by European and U.S. airlines (Miller et al. 2011). ASTM certified HEFA-produced jet fuels in July 2011 (ASTM 2011). While there are only a limited number of HEFA refineries producing jet fuel at the time of writing this guidebook, there are commercial-scale refineries that employ substantially similar technology to produce green diesel. Commercial-scale HEFA refineries are expected to produce approximately 80 million to 100 million gallons of diesel and jet fuel a year and are expected to use regional feedstocks to minimize transportation costs. The refining tech- nology is sufficiently flexible such that a HEFA refinery can be designed to use virtually any plant oil or animal fat. A HEFA facility run to produce maximum distillates would typically produce 20% to 70% diesel, 15% to 45% jet fuel, and the remainder naphtha, LPG, and other by-products (Pearlson 2011). By-products of the HEFA process can be used to produce renewable de-icing fluid, which would provide another potential revenue stream to a HEFA production facility. What is the status of the technology behind the HEFA process? HEFA has been technologically proven, and some operators are willing to guarantee perfor- mance and have the financial strength to honor that guarantee. The number of commercial-scale facilities is expected to increase now that the HEFA jet fuel has been certified as drop-in for use on aircraft.

10 Assessing opportunities for Alternative Fuel Distribution Programs What new infrastructure and equipment will be required to store and distribute alternative jet fuels manufactured by the HEFA process? No changes to existing (1) storage and distribution infrastructure at the airport or (2) equip- ment, including aircraft and engines, are required since, once blended, the fuel is drop-in. Blend- ing can be done both at the point of manufacture, if there is a suitable supply of conventional fuel available, or, more commonly, at the point of sale. This blending is normally accomplished by mixing the contents of two separate tanks into one common tank. Generally, conventional gasoline stations in the United States have two or three tanks used for the delivery of fuel—one for regular gasoline, one for premium, and sometimes one for mid-grade. It is more common for modern refueling stations to have only two tanks and to use a blend of those two tanks to create mid-grade gasoline. The additional cost associated with blending HEFA fuels and others is primarily associated with the cost of cleaning and converting an existing tank to make it suitable for alternative fuels, or the cost of buying a new tank to use as the blending tank. New tanks, including installation, are priced at $35,000 for a 2,000-gallon tank, and about $70,000 for a 10,000-gallon tank. The cost to clean and convert an existing tank is significantly less (Lemas 2012). What are the potential environmental considerations of utilizing the HEFA process to manufacture alternative jet fuels? As with FT fuels, the combustion of HEFA fuels is expected to produce lower sulfur and PM emissions, with similar NOx emissions as conventional jet fuel. The potential for life-cycle GHG emissions savings is substantial but depends heavily on the feedstock. Of particular concern is the effect of land use change. For example, tallow-based HEFA jet fuel has low life-cycle GHG emissions because tallow is essentially a waste product and has minimal life-cycle GHG inputs (Stratton et al. 2010). Alternative jet fuel made from Jatropha or Camelina also has a lower life-cycle GHG footprint compared to conventional jet fuel. However, computation of life-cycle GHG savings is complex and will vary for each refinery. The computation of a crop-based feedstock’s water impact is highly complex and varies widely depending on what, where, and how it is grown. Nevertheless, this computation must be done because the impact may be substantial, particularly due to the increasing visibility of the water-energy-food nexus. HEFA’s water impact is driven primarily by the need for water to grow the feedstock rather than the HEFA process itself. In general, first-generation feedstocks, particularly when irrigated, consume substantially more water per British thermal unit (BTU) of energy content than traditional hydrocarbon-based fuels (DOE 2006). Some second- and third- generation feedstocks may consume less water. However their impact on local water resources where they are grown must be evaluated, especially if they are in arid or water-stressed environ- ments and/or if they draw upon water systems that are used to grow food elsewhere. The pollu- tion impact of pesticides, biocides, and fertilizers along with runoff resulting from agricultural practices must also be evaluated. Under what conditions is the HEFA process cost competitive? The HEFA process is cost competitive when there is: • Availability of low-cost local feedstocks, because this is the largest single cost of the alterna- tive fuel;

What Are the Main characteristics of Alternative Fuels? 11 • Availability of an existing refinery whose infrastructure can be used by the HEFA facility; and • Substantial demand for co-products. What challenges are associated with utilizing the HEFA process to manufacture alternative jet fuels? Some challenges associated with this technology include the following: • HEFA refineries that use plant-based fatty acids must rely on locally grown crops or have access to bulk freight transportation of the feedstock (e.g., rail or pipeline) to be cost efficient. • The business case is difficult without financial and contractual instruments to manage the long-term cost of the feedstock; this is a challenge being worked on by the U.S. Department of Agriculture (USDA). • The use of any edible plant oils such as corn or soy oil as feedstock is controversial because of the potential to compete with the food supply (see the discussion on food versus fuel in Section 5.5.3.1). • The impact of crop-based feedstock on water availability and pollution may be contro- versial because of the increasingly visible water-energy-food nexus (see the discussion in Section 5.5.3.2). Who are the potential users of HEFA alternative jet fuels and co-products? The HEFA process produces a range of products; therefore, the potential users are diverse: • Commercial airlines, military aircraft, and general aviation will use jet fuel. • Surface transportation will use green diesel, for example, taxis, cargo trucks, buses, and rail. • Airport ground support equipment will use green diesel. • Airport facilities or rail/light rail mass transportation will use excess heat and electricity gener- ated by the HEFA process. A more detailed discussion regarding potential user groups, their motivations, and their willingness to pay to use alternative fuels is provided in Section 2.5. 2.2 Alternative Jet Fuels in Development As mentioned in Section 2.1, the field of alternative jet fuels is in active development. Rapid progress is being made to develop processes other than FT and HEFA. The following sections describe three of the most promising processes, all of which are candidates to reach certification in the next few years. (Because the field of alternative jet fuel is very dynamic, some of the terms used to describe processes such as “alcohols to jet,” “fermentation renewable jet,” and “pyrolysis renewable jet” may change over time.) 2.2.1 Alcohols to Jet ASTM has a task force that supports the certification of jet fuel produced from alcohols, with a target certification date of 2013 or 2014. This process converts alcohols into fuels using well- understood chemical processes. Several promising approaches exist, including the synthesis of alcohol from carbon monoxide and modification of bacteria and yeasts to convert sugar into alcohols.

12 Assessing opportunities for Alternative Fuel Distribution Programs What is the status of ATJ technology? Alcohol to jet fuel technology is unproven at commercial scale but is very promising. The co-products of such approaches include green diesel and others that are not yet well established. What additional storage or distribution infrastructure is required for ATJ fuels? No changes to existing (1) storage and distribution infrastructure at the airport or (2) equip- ment, including aircraft and engines, are required, because the certified fuel will be drop-in. What are the potential environmental considerations of utilizing ATJ fuels? It is expected that PM and sulfur emissions will be lower compared to conventional fuels, because the production process will be controlled to produce a clean fuel. Similar to other alter- native fuels, NOx emissions will be largely unchanged from conventional fuels. Although the agricultural feedstocks used in the ATJ process are renewable, the life-cycle GHG emissions of alcohol-based fuels are heavily affected by the resources expended to grow, harvest, and transport the feedstock and by the potential for diversion of arable land from production of human or animal food and the clearance of land to produce energy crops. To the extent biomass feedstock is composed of agricultural waste, it is expected to have a relatively low life-cycle GHG footprint. Potential water impact is substantial, and the increasing visibility of the water-energy-food nexus makes it critical to evaluate. To the extent that most current ATJ technologies under development utilize crops as the source of the alcohol feedstock, ATJ’s water impact is driven primarily by the need for water to grow the feedstock. In general, first-generation feedstocks, particularly when irrigated, consume substantially more water per BTU of energy content than traditional hydrocarbon-based fuels (DOE 2006). Some second- and third-generation feed- stocks may consume less water. However, their impact on local water resources where they are grown must be evaluated, especially if they are in arid or water-stressed environments and/or if they draw upon water systems that are used to grow food elsewhere. Pollution impact of pesti- cides, biocides, and fertilizers along with runoff resulting from agricultural practices must also be evaluated. Computation of a crop-based feedstock’s water impact is highly complex and var- ies widely depending on what, where, and how it is grown. Some contemplated ATJ technologies may bypass the need for crop-derived alcohols, which could potentially reduce water impact. Under what conditions are ATJ fuels cost competitive? The ATJ process is cost competitive when there is: • Inexpensive feedstock, • Minimal feedstock transportation costs, or • Adequate demand for co-products. What are some challenges associated with ATJ fuels? Some challenges associated with this technology include the following: • The technology is young. • Some feedstocks may compete with food.

What Are the Main characteristics of Alternative Fuels? 13 • The impact of crop-based ATJ feedstocks on water availability and pollution may be con- troversial because of the increasingly visible water-energy-food nexus (see the discussion in Section 5.5.3.2). Who are the potential users of ATJ fuels? The potential user groups are those for aviation fuel. As each company is developing pro- prietary technology, it is not clear at this point which co-products may result from the various technologies being developed. 2.2.2 Fermentation Renewable Jet This technology plans to use genetically engineered bacteria to convert sugars directly into alternative jet fuels. This direct conversion has the potential to significantly reduce cost. The co-products, if any, are not yet well established. Certification efforts are under way but there is no firm target certification date as of the writing of this report. What is the status of FRJ technology? FRJ is young and unproven at commercial scale. What additional storage and delivery infrastructure is necessary to support FRJ fuels? No changes to existing (1) storage and distribution infrastructure at the airport or (2) equip- ment, including aircraft and engines, are required, because the certified fuel will be drop-in. What are potential environmental considerations associated with FRJ fuels? The environmental considerations for FRJ fuels are the same as ATJ for local air quality and GHGs (see Section 2.2.1). As for water impact, this can be substantial, and the increasing vis- ibility of the water-energy-food nexus makes it critical to evaluate. To the extent that most current FTJ technologies under development utilize crops as the source of the sugar feedstock, FTJ’s water impact is driven primarily by the need for water to grow the feedstock. In general, first-generation feedstocks, particularly when irrigated, consume substantially more water per BTU of energy content than traditional hydrocarbon-based fuels (DOE 2006). Some second- and third-generation feedstocks may consume less water. However, their impact on local water resources where they are grown must be evaluated, especially if they are in arid or water-stressed environments and/or if they draw upon water systems that are used to grow food elsewhere. Pol- lution impact of pesticides, biocides, and fertilizers along with runoff resulting from agricultural practices must also be evaluated. Computation of a crop-based feedstock’s water impact is highly complex and varies widely depending on what, where, and how it is grown. Under what conditions are FRJ fuels cost competitive? The FRJ process is cost competitive when there is: • Inexpensive feedstock, • Minimal feedstock transportation costs, or • Adequate demand for co-products.

14 Assessing opportunities for Alternative Fuel Distribution Programs What are some challenges associated with utilizing FRJ fuels? Some challenges associated with this technology include the following: • The technology is young. • Some feedstocks compete with food. • The impact of crop-based FRJ feedstocks on water availability and pollution may be con- troversial because of the increasingly visible water-energy-food nexus (see the discussion in Section 5.5.3.2). Who are the potential users of FRJ fuels? The potential user groups are those for aviation alternative fuel. As each company is develop- ing proprietary technology, it is not clear at this point what co-products may result from the various technologies being developed. 2.2.3 Pyrolysis Renewable Jet Pyrolysis converts organic material under high temperature and little oxygen into tar-like crude bio oil, which is then converted into alternative jet fuel. PRJ technology is young. Cer- tification efforts are under way but there is no firm target certification date as of the writing of this report. What is the status of PRJ technology? PRJ technology is young and unproven at commercial scale. What additional storage and delivery infrastructure is required to support PRJ fuels? No changes to existing (1) storage and distribution infrastructure at the airport or (2) equipment, including aircraft and engines, are required, because the certified fuel will be drop-in. What are the potential environmental considerations of PRJ fuels? The environmental considerations for PRJ fuels are the same as ATJ for local air qual- ity and GHGs (see Section 2.2.1). As for water impact, this can be substantial and the increasing visibility of the water-energy-food nexus makes it critical to evaluate. PRJ’s water impact is largely driven by underlying sewage sludge feedstock. Similar to FT, PRJ requires incrementally more water than traditional oil or gas for cooling/BTU; however, this water is largely recaptured, which reduces net water impact. Computation of the feed- stock’s water impact is highly complex and varies widely depending on assumptions about its composition. Under what conditions is PRJ cost competitive with conventional fuels? The PRJ process is cost competitive when there is: • Inexpensive feedstock, as feedstock is likely to account for a significant portion of the cost of the alternative fuel;

What Are the Main characteristics of Alternative Fuels? 15 • Minimal feedstock transportation costs; or • Adequate demand for co-products. What are some potential challenges of utilizing PRJ fuels? Some challenges associated with this technology include the following: • The technology is young. • The impact of PRJ feedstocks on water availability and pollution may be controver- sial because of the increasingly visible water-energy-food nexus (see the discussion in Section 5.5.3.2). Who are the potential users of PRJ fuels? The potential user groups are those for aviation alternative fuel. As each company is develop- ing proprietary technology, it is not clear at this point what co-products may result from the various technologies being developed. 2.3 Aviation Gasoline Aviation gasoline (avgas) is used on piston aircraft for general aviation (GA). It is one of the few remaining leaded fuels in the United States. The FAA is currently looking at options for mak- ing unleaded aviation gasoline available to the GA fleet by 2018; however, there is currently no drop-in alternative fuel available and the agency is investigating its options (FAA 2012). For the purposes of this guidebook, conventional avgas is included because it constitutes a significant part of the energy mix at many airports, in particular small airports with large GA operations; however, since “alternative avgas” is not currently commercially available, only conventional avgas is considered throughout the guidebook and toolkit. 2.4 Alternative Fuels for Surface Applications In contrast to alternative jet fuels, some alternative fuels for surface transportation have been commercially available in the United States for decades. Furthermore, there are more options available for surface transportation fuels and equipment than there are for aircraft use. This section is limited to those alternative fuels considered to be the most commonly available for current and future use at airports in the United States. 2.4.1 Green Diesel The term “green diesel” is used here to describe diesel fuels produced from feedstocks other than conventional petroleum, for example, through an FT or HEFA process, either as a co- product of alternative jet fuel production or as the main output of the production process. Green diesel is a drop-in replacement and can be used in both road and off-road vehicles [e.g., ground support equipment (GSE) at airports], though it is often more acceptable as a blend. It can also be blended with diesel used in train engines, or with “marine distillate oil” for use in ships. Green diesel cannot be blended with bunker or heavy fuel oil. Given the limited number of commercial-scale FT and HEFA facilities in the United States, very little green diesel is cur- rently available for use on U.S. airports, although its availability is expected to increase as more production facilities come into operation.

16 Assessing opportunities for Alternative Fuel Distribution Programs It is important to make a distinction between green diesel as a co-product from an FT or HEFA process and “biodiesel.” See Section 2.4.2 for a discussion of the latter. What is the status of technology for green diesel? Green diesel production through the FT and HEFA processes are understood but enjoy lim- ited commercial availability. This will change as additional refineries come on-line. What are the additional infrastructure requirements for the delivery and storage of green diesel? Nothing additional is required beyond what already exists for conventional diesel. Similarly, there are no restrictions on the types of diesel engines that can use these fuels (GSE, buses, trucks, etc.), because it is a direct replacement to diesel. What are the potential environmental considerations associated with green diesel? Similar to alternative jet fuel, green diesel is chemically very similar to its conventional equivalent and has the potential to provide some environmental benefits. For example, the low hydro carbon and sulfur content of green diesel are likely to result in lower secondary PM emissions as well as lower sulfur emissions. In contrast, the levels of carbonaceous PM are unlikely to be substantially different. Emissions of NOx are more dependent on the temperature at which the fuel is burned and not the fuel formulation, so NOx emissions are unlikely to be affected. The main savings in terms of emissions are from GHGs; however, these savings will depend on several factors, including feedstock choice, production process, and transportation. Potential water impact is substantial and the increasing visibility of the water-energy-food nexus makes it critical to evaluate. Green diesel’s water impact is driven primarily by the need for water to grow the feedstock rather than the manufacturing process. In general, first-generation feedstocks, particularly when irrigated, consume substantially more water per BTU of energy con- tent than traditional hydrocarbon-based fuels (DOE 2006). Some second- and third-generation feedstocks may consume less water. However, their impact on local water resources where they are grown must be evaluated, especially if they are in arid or water-stressed environments and/ or if they draw upon water systems that are used to grow food elsewhere. The pollution impact of pesticides, biocides, and fertilizers along with runoff resulting from agricultural practices must also be evaluated. Computation of the crop-based feedstock’s water impact is highly complex and varies widely depending on what, where, and how it is grown. Under what conditions is green diesel cost competitive? Green diesel is cost competitive under these conditions: • Green diesel is fully interchangeable with conventional diesel and can be typically cost com- petitive when the cost of crude petroleum oil is high. • Some jurisdictions mandate the use of alternative diesel, but few require green diesel because of its limited availability. Mandates affect the cost equation. • Federal regulations and incentives have affected the economics of both green and biodiesel. However, these regulations and incentives are subject to legislative changes. • As demand for green diesel increases and more supply becomes available, economies of scale would help to decrease the cost of green diesel, making it more attractive to produce.

What Are the Main characteristics of Alternative Fuels? 17 What potential challenges are associated with green diesel? Some challenges associated with this technology include the following: • Commercial-scale production of green diesel is currently limited. • Green diesel produced through the HEFA process requires hydrogen and biomass feedstocks, which may make large-scale production challenging. • The impact of crop-based green diesel feedstocks on water availability and pollution may be controversial because of the increasingly visible water-energy-food nexus (see the discussion in Section 5.5.3.2). Who are the potential users of green diesel? Potential users are all those who use vehicles that consume diesel: • Airport authorities and their tenants operating airside and groundside equipment. • Taxi drivers, cargo truck operators, and bus operators. • Non-road transportation providers—public transport and cargo via rail and water transportation. • Users of airport infrastructure, e.g., standby generators. • Private vehicles. A more detailed discussion regarding potential user groups, their motivations, and their willingness to pay to use alternative fuel is provided in Section 2.5. 2.4.2 Biodiesel The term “biodiesel” refers to fuels produced through esterification. Biodiesel is generally made from vegetable oils such as palm, soy, rape seed, and used cooking oil; technically, pure vegetable oils (PVO) and lightly processed fatty acid methyl esters (FAME) are also biodiesels. Vehicle and engine manufacturers for road transport and GSE do not recommend the use of PVO but do permit blends of low concentrations of FAME with petroleum diesel (e.g., at 20%). Consequently, the analysis below is for FAME only, and excludes PVO. In the remainder of the guidebook, the focus is on biodiesel as a 20% mix with conventional diesel (i.e., B20). Other blend ratios are possible, but B20 is the most common blend in the United States (DOE 2011d). What is the status of biodiesel technology? Biodiesel technology is relatively mature. There are many production routes ranging from very small-scale production using a mechanism known as phase separation to large-scale pro- duction using distillation. However, while the technology is sound, biodiesel will solidify at low temperatures and has other properties that are not as suitable for existing applications as are the properties of petroleum-based diesel. This is the reason why biodiesel is generally sold as B20. What new infrastructure is required to support biodiesel storage and delivery? In terms of pipelines and storage infrastructure, there is little that needs to be changed at the airport setting to support B20; however, FAME is considered a pollutant in jet fuel, so care must be taken with storage and handling infrastructure so that jet fuel does not come into contact with FAME. While B20 is an acceptable direct substitute to conventional diesel in many applications,

18 Assessing opportunities for Alternative Fuel Distribution Programs pure biodiesel (B100) or high-concentration biodiesel blends are not for several reasons. Pure biodiesel is an attractant of water, meaning that when held in tanks for long periods of time, water will collect at the bottom of tanks and cause corrosion, fuel filter clogging, and pos- sible engine failure (CDM Federal Programs Corporation et al. 2012). Additionally, biodiesel stored over time can react with oxygen and gel. Biodiesel tends to gel at temperatures higher than conventional diesel, so its use in cold climates is not recommended. Adding storage-enhancing additives or using a dry, semi-sealed, cool container can mitigate some of the storage issues associated with biodiesel. There are restrictions on the types of diesel engines that can use biodiesel, and at what blend strength. B20 is currently the most popular blend because many existing diesel engines can use it with minor or no modifications, but concentrations higher than that have potential to degrade the rubber and other internal engine components. This characteristic impacts GSE, buses, trucks, and other vehicles common in the airport setting. There are over 600 biodiesel refueling stations in the United States (DOE 2011c). What are the potential environmental considerations of biodiesel? Changes in PM and NOx emissions depend on blend strength and vehicle technology, particularly fuel delivery systems and combustion chamber design. A 2002 U.S. Environ- mental Protection Agency (EPA) summary suggests that using B20 may increase NOx emis- sions by around 2% (EPA 2002). A more recent study (AEA 2008) suggests that using B15 leads to changes in NOx emissions of +1% for heavy-duty vehicles, and no change for pas- senger cars. Biodiesel is affected by the water-energy-food nexus, though not in the same context as green diesel. While the pertinent component of the nexus for green diesel is water and water utilization in evaluating the suitability of that fuel, food serves as the pertinent component of the nexus with respect to biodiesel. The spectrum of feedstock that can be used to create biodiesel includes culi- nary oils such as vegetable oil and sunflower oil. Competition for the use of these oils between the food and energy industries would likely result in higher prices for the feedstock and thus higher prices for resultant products in both industries, an unappealing outcome. Therefore, significant research to focus on feedstocks that are not heavily used in other industries, such as Jatropha and Camelina, would assist in mitigating this issue. Under what conditions is biodiesel cost competitive? B20 is typically cost competitive with conventional diesel (DOE 2011c). Historically, govern- ment incentives have helped to support the price competitiveness of biodiesel. As of January 2012, a gallon of B20 cost $3.95 compared to $3.86 for conventional diesel. When normalizing for energy content, a gallon of B20 costs $4.02 (DOE 2012b). What are some challenges associated with biodiesel? Some challenges associated with this fuel include the following: • Biodiesel can dissolve more water relative to conventional diesel. This can lead to corrosion of storage tanks, fuel tanks, and connecting pipes. • FAME has a higher freezing point than conventional diesel. This can cause difficulties in cold-climate operations. • Microbial growth can be an issue, relative to the quite sterile conventional diesel. Microbes growing in the fuel can block fuel filters or injectors.

What Are the Main characteristics of Alternative Fuels? 19 • Diesel engine warranties often restrict the concentration of biodiesel permitted in the fuel. • There is the potential problem of fuel deteriorating, or even polymerizing, in the tanks of vehicles or equipment left standing, e.g., standby generators. • The impact of crop-based biodiesel feedstocks on water availability and pollution may be controversial because of the increasingly visible water-energy-food nexus (see the discussion in Section 5.5.3.2). • Biodiesel produced by first-generation feedstocks are at the core of the world’s food-versus- fuel debate. Who are the potential users of biodiesel? Potential users of biodiesel include the following: • Road transport—Biodiesel can be blended with petroleum diesel (up to 7% in Europe; based on ASTM D975 (ASTM 2008), up to 5% in the United States), or used in higher proportions in dedicated fleets without engine modifications. • Rail—Biodiesel is not generally used in the United States; however, a study in the UK indicates a blend of up to 20% (i.e., B20) can be used (RSSB 2006). • Water transportation—Biodiesel is not used for main engines but may be permitted for aux- iliary engines. Oceangoing ships use bunker fuel, a heavy fuel oil that is semi-solid. Given its semi-solid state, bunker fuel cannot be blended with liquid fuel, particularly biofuels, prior to sailing. In addition, maritime shipping fuel tanks are often open to the atmosphere in a damp and salty environment over the sea, which means that use of biofuels can result in greater cor- rosion and microbial growth. A more detailed discussion regarding potential user groups, their motivations, and their will- ingness to pay to use an alternative fuel is discussed in Section 2.5. 2.4.3 Ethanol Ethanol is usually made from the fermentation of sugars (e.g., from cane and beet) or of starches (e.g., from corn or wheat). In the future, it may be made from non-edible biomass such as wood or crop stalks (known as ligno-cellulosic derived ethanol). Ethanol can be blended with gasoline and used in both road vehicles and off-road, spark-ignition vehicles. Ethanol is typically blended at 10% with gasoline in all of the United States. This guidebook focuses on mixtures with 85% ethanol (i.e., E85), which is considered an alternative fuel by the EPA (DOE 2011e). Flex-fuel vehicles (FFVs) can use both gasoline and E85 for propulsion. FFVs are widely available—there were over 8 million of them on U.S. roads as of August 2010 (DOE 2011c). What is the status of ethanol technology? Commercial-scale production of ethanol has been available for decades; ethanol has been added in low concentrations to gasoline for about the same time. Ethanol has been blended with conven- tional gasoline, currently limited to 10% (E10) in the United States, for around the last 30 years. However, in November 2010 the EPA announced it would allow up to 15% ethanol blend (E15) for use in cars and light trucks built since 2007 (EPA 2010a; this is more commonly known as the “first partial waiver”). Since then, further announcements have been made, indicating that a majority of vehicles manufactured since 2001 may safely use E15 (EPA 2011). Furthermore, E85 is increasingly becoming available in the United States, with one source suggesting E85 is available from approximately 2,650 stations in the United States in

20 Assessing opportunities for Alternative Fuel Distribution Programs January 2011 (though this is still a small fraction of the approximately 140,000 publicly acces- sible gasoline stations in the United States). Price and availability of E85 are available from e85prices.com. What additional infrastructure is required for the storage and delivery of ethanol? The main concern with ethanol is that it tends to absorb water from the atmosphere, which can be a challenge for storage infrastructure and engines. At low blend ratios (e.g., less than 15%), there are little to no concerns; however, high blend ratios, such as E85 used in FFVs, require modi- fications to a vehicle’s fuel distribution system and dedicated storage tanks. E85 tends to freeze at a higher temperature than does conventional gasoline or lower concentration ethanol blends (CDM Federal Programs Corporation et al. 2012). As a result, cold weather climates may find that they have to switch to a lower ethanol blend or use additives during the winter months in order to maintain engine starting integrity. This shelf life can be lengthened to several years if the ethanol is stored in sealed tanks. Ethanol absorbs more water than gasoline, and when this water evaporates, valuable components of the ethanol are lost. Ideally, an on-airport E85 facility would be sized cor- rectly to avoid fuel sitting in tanks for long periods of time. For those facilities at risk of having fuel inventories for long periods of time, sealed storage tanks are available to mitigate the problem of spoilage or evaporation. What are the potential environmental considerations of ethanol? Generally, research has shown that for ethanol blends up to 25% (E25), PM shows a clear reduction, whereas NOx and hydrocarbon emissions results are mixed—some show significant reductions and others show significant increases (AEA 2008). For the E85 blend, the review of available data indicated no change in the emission factors of NOx or hydrocarbons, but a 20% reduction in PM emissions. As in the cases of green diesel and biodiesel, the main potential ben- efit is from reductions in GHG emissions subject to specific assumptions regarding feedstocks, production, and transportation. Potential water impact is substantial and the increasing visibility of the water-energy-food nexus makes it critical to evaluate. Ethanol’s water impact is driven primarily by the need for water to grow the feedstock, especially in the case of corn-based ethanol. In general, first- generation feedstocks, particularly when irrigated, consume substantially more water per BTU of energy content than traditional hydrocarbon-based fuels (DOE 2006). Some second- and third-generation feedstocks may consume less water. However their impact on local water resources where they are grown must be evaluated, especially if they are in arid or water-stressed environments and/or if they draw upon water systems that are used to grow food elsewhere. The pollution impact of pesticides, biocides, and fertilizers along with runoff resulting from agricultural practices must also be evaluated. Computation of a crop-based feedstock’s water impact is highly complex and varies widely depending on what, where, and how it is grown. Under what conditions is ethanol cost competitive? Generally, ethanol is cost competitive only when it is blended with gasoline. However, because its energy density is around two-thirds that of gasoline, vehicles require more fuel to travel the same distance; hence, its cost needs to be around two-thirds that of gasoline. For the E85 blend, the cost needs to be around 70% that of conventional gasoline or 73% that of an E10 blend for the same fuel economy measured in dollars per mile driven.

What Are the Main characteristics of Alternative Fuels? 21 As of January 2012, a gallon of E85 cost $3.14, compared to $3.37 for a gallon of conventional gasoline. Taking into account the energy differential between the two fuels, an energy-equivalent gallon of E85 cost $4.44 (DOE 2012b). What are some challenges associated with ethanol? Some challenges associated with this fuel include the following: • As mentioned above, ethanol absorbs water from the atmosphere, which is a challenge for the smooth running of engines and storage infrastructure. Furthermore, it is water soluble; during a rainstorm, the rainwater further dilutes the ethanol blend. Pure gasoline is not water soluble; water that penetrates into the storage tank lies at the bottom. • The presence of water leads to corrosion. • There are materials compatibility challenges for ethanol blends higher than E15 that affect fuel lines, seals, and other equipment. • Ethanol has low energy density relative to gasoline. A consumer needs 1.54 gallons of ethanol to achieve the same energy as one gallon of gasoline. • Flex fueled vehicles are capable of using a blend of up to 85% ethanol (E85). Therefore, more sophisticated fuel management systems must be used, which leads to additional vehicle pur- chase costs. • Ethanol also has challenges regarding fuel costing, especially if tax is charged on a volume basis because of the low energy density. • Ethanol produced by first-generation feedstocks is at the core of the world’s food-versus-fuel debate. • The impact of crop-based ethanol feedstocks on water availability and pollution may be con- troversial because of the increasingly visible water-energy-food nexus (see the discussion in Section 5.5.3.2). Who are the potential users of ethanol? The potential users are all those who currently use gasoline. Regarding the airport setting, there is some potential for airside use on, for example, some airport vehicles and some GSE. However, for landside use the majority of fuel burned is gasoline. Two primary factors affect the net financial benefit or cost of using E85. First, E85 has a fuel economy penalty which is constant at around 30%. Second, the price differential between E85 and gasoline fluctuates. To achieve parity, the price differential needs to be around 30%. Con- sequently, users of E85 are likely to need to make the conscious decision that they are willing to pay extra for the fuel in exchange for environmental benefits. A more detailed discussion regarding potential user groups, their motivations, and their willingness to pay to use an alternative fuel is provided in Section 2.5. 2.4.4 Compressed Natural Gas Natural gas is an important fossil fuel, most commonly used for heaters, boilers, and elec- tricity generation. Natural gas is prevalent and burns cleaner than conventional gasoline. Though natural gas is responsible for around a quarter of all energy used in the United States, only 0.1% of that amount is used for transportation fuel. CNG is increasingly being used for surface transportation applications, most notably for buses, dump trucks, and other heavy vehicles.

22 Assessing opportunities for Alternative Fuel Distribution Programs What is the status of CNG technology? CNG is available in commercial scale because a wide-ranging, extensive network of pipelines exists in the United States for natural gas transport and delivery. The technology for distribu- tion, storage, and road vehicles is also available. As mentioned above, CNG is common in heavy vehicle fleets but not as commonly seen as a fuel for conventional vehicles. This is because the containers that must be used to hold the fuel are extremely heavy and add significant weight to any vehicle. While this extra weight is problematic in terms of both weight and mass needed to support the storage tanks in the context of light-duty vehicles, it is not as much of an issue in heavy vehicles. Conversions of both heavy and light vehicles to run on CNG are common. What additional infrastructure is required to support CNG? There is an extensive low-pressure natural gas infrastructure already in place, such as that reaching into many residential and commercial buildings in the United States and a number of airports that have CNG stations (Clean Energy Fuels 2012). For vehicle use, there is an additional requirement of safely providing compressed gas at around 3,000 psi which requires additional equipment to dry, compress, and store the gas at high pressure. In addition, dedicated vehicles are required to run on CNG. What are the potential environmental considerations of CNG? If CNG is used to replace diesel in appropriate vehicles, NOx and PM emissions would be reduced. There is the potential for GHG emissions reductions on a life-cycle basis, but this is subject to assumptions regarding extraction, processing, and transportation. If CNG is used to replace gasoline, then there is likely to be a small reduction in GHG emissions and a moderate reduction in PM. The water impact of CNG depends on the way the gas was extracted. Natural gas extracted via conventional drilling methods consumes the least amount of water/BTU relative to any other transportation fuel (DOE 2006). Widespread natural gas extraction via hydraulic fracturing of shale rock is a relatively new technique that has been used at commercial scale only within the last 10 years. Its pollution impact and relative water consumption and withdrawal impact are a present subject of debate by the public. Under what conditions is CNG cost competitive? Natural gas is a fossil fuel whose price fluctuates somewhat similarly to the cost of crude oil but is driven by its own market demands. Hence, its competitiveness is less affected by crude oil prices than many other alternative fuels. Prices of natural gas have been very low in the United States in recent years. As of January 2012, the energy-equivalent price of CNG compared to a gallon of gasoline was $2.13. The price of CNG containing the same amount of energy as a gallon of diesel was $2.38 (DOE 2012b). What are some challenges associated with CNG? Some challenges associated with this fuel include the following: • The principal challenge of CNG is its low energy density compared to diesel or gasoline cou- pled with its need for heavier, larger storage tanks on vehicles. This results in more expensive vehicles and the need to refuel more often. • The low energy density has limited the attractiveness of CNG in personal vehicles.

What Are the Main characteristics of Alternative Fuels? 23 • A consequence of the relatively low number of CNG-powered vehicles is a much less mature refueling infrastructure. Around 900 refueling stations offer CNG compared to a total of approximately 140,000 gasoline stations in the United States (Chevron 2006). • The impact of natural gas extracted via hydraulic fracturing of shale rock on water availability and pollution is a present subject of debate by the public (see the discussion on the water- energy-food nexus in Section 5.5.3.2). Who are the potential users of CNG? Potential users of CNG include the following: • Fleets of buses or shuttles with a significant number of units can justify the investment in dedicated vehicles and infrastructure. • Private vehicle owners may switch to CNG vehicles once the refueling infrastructure becomes more widespread. A more detailed discussion regarding potential user groups, their motivations, and their willingness to pay to use an alternative fuel is provided in Section 2.5. 2.4.5 Liquefied Petroleum Gas LPG is a fossil fuel comprising principally propane but sometimes containing small quantities of butane and is manufactured as part of both the petroleum-refining and natural gas-refining processes. These are gases at ambient temperatures but can be liquefied at relatively modest pres- sures (e.g., 100 psi). Consequently, refueling is nearly always by the transfer of the liquid form. LPG is close to a direct replacement for gasoline, and the conversion between fuel supplies is relatively straightforward. (However, some adaptation is required to meet the same emission standards demanded for gasoline vehicles.) Consequently, a considerable number of different vehicle types (either as original builds or via conversions) are available alongside the gasoline- fueled equivalents. LPG is also widely used on certain types of equipment operating in enclosed facilities, such as forklifts. What is the status of LPG technology? LPG has been available as an on-road fuel source for more than 80 years. The technology associated with it is well understood. New-build LPG vehicles are available as are bi-fuel vehicles that can use conventional gasoline as well as LPG. These bi-fuel vehicles maintain separate fuel systems as gasoline and LPG cannot use a shared system. In terms of infrastructure, LPG produc- tion and refueling is commercially available but not nearly as widespread as gasoline. What new infrastructure is required to support LPG? Dedicated infrastructure is required to store and dispense LPG. However, given the relatively low pressures required to distribute, the infrastructure is not as expensive as for CNG. The num- ber of LPG refueling stations in the United States is almost triple that of CNG—around 2,600 compared to 900 for CNG (DOE 2011b). What are the potential environmental considerations of LPG? When LPG is used to replace gasoline, there is likely to be a small reduction in GHG and a moderate reduction in PM.

24 Assessing opportunities for Alternative Fuel Distribution Programs The water impact of LPG depends on the way it was extracted. Hydrocarbons extracted via conventional drilling methods consume the least water/BTU relative to other transportation fuels (DOE 2006). Widespread extraction of hydrocarbon liquids via a method called hydraulic fracturing of shale rock is a relatively new technique that has been used at commercial scale only within the last 10 years. Its pollution impact and relative water consumption and withdrawal impact are a present subject of debate and uncertain. Under what conditions is LPG cost competitive? A gallon of LPG has around 75% of the energy of a gallon of gasoline. Hence, it needs to be cheaper than gasoline to be cost competitive. As of January 2012, a gallon of LPG cost $3.08, compared to $3.37 for a gallon of gasoline and $3.86 for a gallon of diesel. On an energy- equivalent basis, however, LPG cost $4.16 per gallon compared to gasoline and $4.75 per gallon compared to diesel. What are some challenges associated with LPG? LPG has few challenges. However, the impact of hydrocarbons extracted via hydraulic fractur- ing of shale rock on water availability and pollution is a present subject of debate by the public (see the discussion on the water-energy-food nexus in Section 5.5.3.2). Who are the potential user groups of LPG? Since in many respects LPG is a replacement for gasoline, the potential users are all those who currently use gasoline. Regarding the airport setting, there is little airside use for LPG as most vehicles use diesel. However, for landside use the majority of fuel burned is gasoline. LPG is a common alternative fuel for fleets, buses, delivery trucks, and police cars in the United States, powering around 270,000 vehicles. However, overall this is only just over 0.1% of the number of registered vehicles in the United States (DOT 2011). This implies that the number of potential consumers for LPG is very significant. A more detailed discussion regarding potential user groups, their motivations, and their will- ingness to pay to use an alternative fuel is provided in Section 2.5. 2.4.6 Electricity Electricity is increasingly being used in airports around the world to power vehicles as well as aircraft when they are parked at the gate. This allows aircraft to meet their power needs without having to turn on the engines or auxiliary power unit (APU) with consequent savings in fuel burn and emissions. Electricity can also be used for off-airport surface transportation, such as buses, shuttle fleets, and taxis. Electricity can also be a by-product of alternative jet fuel production. The amount of electric- ity that is generated is a variable that depends on the overall production strategy for the facil- ity. For example, in FT plants, the amount of electricity produced is a compromise between processing synthesis gas to produce maximum volumes of transportation fuel and burning it to produce heat and electricity. Typical ratios of liquid fuel production to electricity production for FT plants range between 2 million and 3 million gallons of liquid fuel per megawatt of electricity generated (Swanson et al. 2010; Liu et al. 2011).

What Are the Main characteristics of Alternative Fuels? 25 What is the status of electricity technology? Electricity is a widespread available and mature technology. Examples of airports adopting electrical vehicles include Minneapolis–St. Paul International Airport (EEN 2009), London Heathrow Airport (SEV 2008), Tokyo Haneda Airport (Frid 2008), and many others (FAA 2006a; FAA 2010b). What additional infrastructure is required for electricity delivery and storage? Basic electricity infrastructure is widely available at airports. However, additional charging stations for electric vehicles must be provided. If principally overnight charging is used, then limited additional infrastructure capacity may be needed. However, higher demand for electric- ity for vehicle or aircraft use will require the current infrastructure at airports (e.g., sub stations, transmission lines, etc.) to be enhanced or upgraded; this usually entails concrete removal/ replacement on the ramp and may need the purchase of additional real estate for siting. Addi- tional GSE vehicles may also need to be purchased to cover charging downtime. What are the potential environmental benefits of utilizing electricity in lieu of other fuels in an airport setting? Electric vehicles generate zero NOx and significantly less PM emissions than gasoline or diesel engines at the point of use (all vehicles, including electric vehicles, generate some PM associated with brake and tire wear). In addition, the use of electrified gates reduces fuel burn on aircraft engines or APUs while parked at the gate. Life-cycle GHG emissions depend greatly on how the electricity is generated. Similarly, potential water impact depends on how the electricity is generated—thermoelectric plants (coal, natural gas, or nuclear) and hydroelectric-, solar thermal-, solar photovoltaic-, wind-, and biomass-generated electricity all have widely different impacts on water availability and pollution. Under what conditions is electricity cost competitive? Electricity rates and the market are well understood and vary based on certain factors related to how it is generated and distributed, and market conditions. Access to cheaper electricity than what is provided by the grid will have a positive impact on the program financials. However, any savings in electricity costs will need to be considered in the context of the overall cost of additional equipment and infrastructure and the payback time period. What are the potential challenges associated with electricity? Electricity has relatively few challenges. The range of electric vehicles can be a concern; how- ever, if vehicles are used primarily on or around the airport, this concern decreases. In cold weather climates, the battery specification will need to be considered; more expensive batteries will need to be used (i.e., not lead acid batteries) when required, and lead acid batteries will need to be kept above freezing temperatures when not in use. The impact of electricity production on pollution depends on the source of the energy used to generate the electricity and may be controversial because of the increasingly visible water- energy-food nexus (see the discussion in Section 5.5.3.2).

26 Assessing opportunities for Alternative Fuel Distribution Programs Who are the potential user groups of electricity? Electricity is used (or could be used) within airports in the following ways: • Within buildings—lighting, signage, escalators, lifts, baggage carousels • Out to planes—moving walkways, jetways • Airside transport—baggage tugs, belt loaders, forklift trucks, cargo tractors, pushback tractors • Other airside uses—as fixed electrical ground power and for generation of preconditioned air (PCA) for aircraft • Landside road transport—passenger cars, electric vans, rental car and hotel shuttles, taxis • Other landside transport—inter-terminal transit systems, railways A more detailed discussion regarding potential user groups, their motivations, and their willingness to pay to use an alternative fuel is provided in Section 2.5. 2.5 Potential User Groups and Their Motivations Potential users can be divided into two groups depending on their use of alternative jet fuel or other alternative fuels. 2.5.1 Potential Users of Alternative Jet Fuel This group includes users of conventional jet fuel such as passenger and cargo airlines and military aircraft. The aviation community has indicated their support and interest in using alter- native jet fuels as a means to diversify the jet fuel pool, ensure reliability of supply, enhance energy security, and provide potential environmental benefits (ATA 2010). 2.5.2 Potential Users of Other Alternative Fuels The following list identifies the key potential user groups for alternative fuels and their motivations: • Airport operators—Airports of all sizes have their own fleets of vehicles that operate on a vari- ety of fuels, mainly gasoline and diesel. These are clear candidates for using drop-in alternative fuels, such as green diesel or biodiesel. Airports could also be encouraged to use other alternative fuels that may require dedicated fleets, such as CNG or E85, with potential funding from state or federal programs such as the Voluntary Airport Low Emissions (VALE) program (FAA 2011c). Further motivations for airports’ introducing alternative fuels include community outreach programs, energy purchasing contracts, and turning waste streams into energy. • Airport tenants—Airlines, ground service providers, rental car facilities, and other concessions operate significant amounts of vehicles. These operators can be encouraged to use alternative fuels via, for example, joint purchasing with airport GSE through a VALE grant. Alternative fuels can also be encouraged by variable charging structures for licenses to operate airside premises and services. In addition, joint energy purchasing contracts could help reduce energy costs and, at the same time, encourage use of alternative fuels. • Bus and shuttle operators—These operators could be encouraged to use alternative fuels through preferential treatment by the airport. This preferential treatment could include allo- cation of bus and shuttle stops closer to terminal building exits and lower charges for operating airport services and parking. These incentives could be enough for adoption of drop-in fuels, such as green diesel or biodiesel, which would require little to no modification to vehicles.

What Are the Main characteristics of Alternative Fuels? 27 For conversion to other types of alternative fuels that would require investment in dedicated vehicles, such as CNG or electricity, further incentives from the airport and local and federal programs may be required. Airports can work with operators to encourage more alternatively fueled vehicles when vehicle replacement is an option. • Taxi and limousine operators—Similar to buses and shuttles, taxis and limousines could be encouraged to use alternative fuels by the airport granting preferential vehicle treatment. This could include, for example, preferential allocation of taxi passengers by airport staff at terminal building exits and lower charges for operating at airport and related parking charges. Similarly, airports can work with taxi fleet operators to encourage more alterna- tively fueled vehicles, including switching to other fuels such as CNG or electricity, when vehicle replacement is an option. • Trains—As trains tend to operate over a fixed route and be fueled at a central depot, it is more feasible that airport operators work with county and state partners to encourage wider uptake of alternative fuels. These are likely to be limited to drop-in fuels in most cases. However, there is the possibility that new or even existing rail lines to an airport could be electrified, such as via an airport development project, and agreements in terms of supplying electricity from an alternative fuel facility put in place. • Cargo truck operators—Truck fleets based at the airport, such as those servicing air cargo or package delivery operations, are a potentially significant source of demand for alternative fuels. These operators may be interested in supporting and benefitting from alternative fuel refueling options on-site. Truck operators not based at the airport may be harder to influence, although incentives such as preferential buying from suppliers who use alternative fuel trucks may act as a form of motivation. • Private vehicle operators—Private vehicles constitute a large percentage of the traffic to and from U.S. airports, representing a significant potential demand for alternative fuels. It is unlikely that airports acting alone could encourage public car drivers to change their vehicles to ones running on alternative fuels. However, in collaboration with county and state partnerships, it is possible that a larger proportion of the public could be encouraged to drive alternatively fueled vehicles, such as by increasing fuel options at gas stations and other mechanisms. Airports could play a role by providing refueling options for alternative fuels, for example, charging bays for electric vehicles and CNG dispensers, and incentives such as variable parking lot charges and dedicated spaces closer to terminal buildings. • Water transportation (ocean or freshwater)—Ferries and small passenger boats generally use gasoline or diesel engines comparable to those in automobiles and so are ideal candidates to utilize alternative fuels. In an airport setting, joint purchases of biodiesel and green diesel could lower costs and increase efficiency by utilizing economies of scale inherent in purchase agreements. However, it is exceedingly rare that an airport utilizes ferries or boats as a primary method of public transportation to and from the facility. In fact, Boston Logan International Airport is unique among major U.S. airports in offering scheduled ferry service from the airport to destinations in downtown Boston. As maritime modes are not a normal part of the mix of surface transportation options at most airports, they are not a focus of this report. • Off-airport users—The unique role that the airport plays within a community offers an opportunity for the airport itself to take a lead role in the provision of alternative fuels for air- port operations as well as for off-airport operations undertaken by the general public. Given their physical characteristics, airports can use alternative fuels to expand their businesses. Storing and distributing drop-in alternative fuels requires no significant new investment in infrastructure on the airport’s part, which lessens the cost of providing the fuel to the com- munity. Most new investment would be focused on expansion of facilities and infrastructure, the cost of which could be borne by a combination of user groups. Alternatively, if airports do not wish to directly manage fuel storage and delivery of alternative fuels, they could lease land out to a third party and still have the potential to capture value. The provision of alternative

28 Assessing Opportunities for Alternative Fuel Distribution Programs fuels to off-airport customers has the potential to strengthen the financial position of airports that choose to explore it. When considering the motivations for operators to switch to alternative fuels, especially for surface transportation, it is important to keep in mind conclusions from observations and past experience: • When purchasing a vehicle, a buyer becomes committed to using specific types of fuel, e.g., diesel or gasoline, as the vehicle cannot be switched between the two. Behavioral studies suggest commercial users take this into account when purchasing new vehicles (Anable and Lane 2008). • When faced with choices of fuels compatible with a vehicle, price is a key motivation. Con- sumers often purchase a lower-priced fuel. At the same time, in many cases, a higher initial vehicle cost will dissuade buyers from choosing a fuel technology that has a lower life-cycle cost. Uncertainty regarding new and unproven technologies can also play a role. • Operators of commercial vehicles shun fuels they believe contribute to higher maintenance or replacement costs. This is what happened in Germany recently, where operators balked at purchasing E10 in spite of widespread encouragement to do so (SOL 2011). • For commercial operators, profit is a key motivation and, as discussed above, pricing struc- tures for airport-related charges could be used to make alternative fuels more desirable. • A perfect opportunity for considering alternative fuel vehicles is when the existing equipment reaches its useful life and replacements are being considered. This applies to both airport and non-airport vehicles. Grants and other incentives through local and federal programs can help reduce the cost of alternative fuel equipment. 2.6 Current Status of Fueling Infrastructure for Alternative Fuels in the United States The number of refueling stations for a number of alternative fuels in the United States is shown in Figure 1. Electricity has the highest number of refueling points with 12,542, while biodiesel has the least with 679. Note: Biodiesel includes B20 and above; electric charging units are counted once for each outlet. Figure 1. Number of U.S. alternative fuel refueling stations, January 2012 (DOE 2011b).

What Are the Main Characteristics of Alternative Fuels? 29 For illustration purposes, it is useful to compare the penetration of alternative fuel infrastructure to that of conventional fuel. As can be seen in Figure 2, the number of gasoline stations and diesel stations are orders of magnitude higher than that for alternative fuels. Note that gasoline and diesel station counts are 2010 estimates from Hart Energy Consulting using data from the 2007 U.S. Eco- nomic Census, while alternative fuel station counts are updated monthly by the Alternative Fuels Data Center. Given the long-term steady decline in the number of conventional gasoline stations in the United States, it is likely that the current number of stations in the country is lower than the estimates provided. However, the number of conventional gasoline stations offering diesel has steadily increased from 35% in 1997 to 52% in 2007 (Hart Energy Consulting 2010) and has likely continued to climb as remaining owners of conventional gasoline stations seek ways to diversify their revenue streams in the current economic environment. The United States has seen a decrease in the number of traditional gasoline refueling stations in the last two decades while all other fuels have seen growth. This corresponds to decreas- ing gasoline usage per capita for U.S. residents primarily due to rising passenger vehicle fleet efficiency, among other factors. Diesel is the second most prevalent liquid fuel used for motor vehicles and, unlike gasoline, has been increasingly offered at refueling stations nationwide. It is currently available in about half of all U.S. stations (Hart Energy Consulting 2010). This is posi- tive for the commercialization of green diesel, which is a drop-in fuel that can work effectively with existing infrastructure. Biodiesel, on the other hand, must have dedicated fueling and storage infrastructure because it is not a drop-in fuel and requires separate facilities from regular diesel. Therefore, the number of stations that have invested in infrastructure to serve biodiesel blends (particularly blends higher than B20) has been relatively slow. However, automobile manufacturers are beginning to support the use of low-blend biodiesel in traditional diesel engines with only very minor modifications. As the supply of biodiesel increases and the price decreases, more manufacturers will likely follow this lead. In the United States, CNG has been utilized primarily as a fuel for large commercial vehicles such as buses, because of the heavy weight of CNG tanks; for vehicles that were not originally designed for CNG, a conversion involves using empty space for tank storage. This often results in the CNG tanks being located in the trunks for converted cars and in the beds for converted *Estimates using data from the 2007 U.S. Economic Census Figure 2. Number of U.S. refueling stations, 2010 (Hart Energy Consulting 2010; DOE 2011b).

30 Assessing opportunities for Alternative Fuel Distribution Programs trucks. These disadvantages have, in the past, held down demand for what is a viable alternative fuel. However, CNG-specific vehicles often have tanks installed under the vehicle, which saves space and increases the appeal of CNG as a fuel. Refueling stations for CNG, while plentiful in some other parts of the world, are still quite rare in the United States for passenger vehicle use. Ethanol (E85) has significant fueling infrastructure in the United States, largely as a result of government efforts to use it as a primary alternative fuel for passenger vehicles. Only five states (Alaska, Maine, New Hampshire, Rhode Island, and Vermont) have no E85 refueling stations, and many states, primarily in the Midwest, have hundreds of E85 stations (Chevron 2006). How- ever, the growth of E85 as an alternative fuel is constrained by the amount of feedstock available to manufacture it. These constraints have been seen in the past in Brazil, a country that has the world’s largest fleet of ethanol-powered vehicles and more than 35,000 refueling stations that offer the fuel. Sugarcane is the primary feedstock for Brazilian-produced ethanol. Though sugar- cane is widely cultivated in Brazil, supply disruptions and shortages have periodically been seen as a result of poor harvests and increasing internal and external demand (McConnell et al. 2010). Electricity, used as a substitute for traditional fuel, has shown promise as an alternative. Though not a liquid fuel, advancing battery technologies have resulted in production of all- electric vehicles that have enough range to cover a typical commute. The fueling infrastructure related to all-electric vehicles has begun to accelerate in recent years, and the widespread avail- ability of electricity indicates that its utilization will continue to climb. The airport setting offers a greater advantage to electric-powered vehicles than does the market for powered vehicles as a whole, as the decreased range of electric vehicles relative to vehicles powered by gasoline or diesel is less of an issue.