14 Airlines Sign MOU for Camelina-Based Renewable Jet Fuel

Seattle-based AltAir Fuels announced Tuesday it has entered into a Memorandum of Understanding (MOU) with 14 major airlines from the United States, Mexico, Canada and Germany, led by the Air Transport Association (ATA), to negotiate the purchase of up to 750 million gallons of renewable jet fuel and diesel derived from camelina and produced by AltAir Fuels.

The renewable fuel, to be produced at a new facility in Anacortes, Wash., would replace about 10% of the petroleum fuel consumed annually at Seattle-Tacoma International Airport, reducing carbon emissions by about 14 billion pounds over 10 years.

Camelina oil will be converted into both renewable jet fuel and diesel
at a new facility to be located at the existing Tesoro oil refinery in
Anacortes, Wash. Based on analysis of U.S. Department of Agriculture
data for comparable projects, AltAir estimates the project will create
hundreds of jobs in a variety of industries, including farming and
agricultural logistics, engineering and construction, and operations,
maintenance and refining.

The facility will have a nameplate capacity of 100 million gallons per
year, and is slated to begin operations in 2012. The camelina oil will
be sourced from Montana-based Sustainable Oils, which has the largest
camelina research program in North America and production contracts
with numerous farmers and grower cooperatives. AltAir has chosen
refining technology developed by UOP, LLC, a Honeywell company (NYSE:
HON), which has already produced biojet fuel for various test flights
and U.S. military contracts in 2009.

The participating airlines include Air Canada (AIDIF.PK), American Airlines (NYSE: AMR), Atlas Air (Nasdaq: AAWW), Delta Air Lines (NYSE: DAL), Alaska Airlines (NYSE: ALK), FedEx Express (NYSE: FDX), Hawaiian Airlines, JetBlue Airways (Nasdaq: JBLU), Lufthansa German Airlines (DLAKY.PK), Mexicana Airlines, Polar Air Cargo, United Airlines, UPS Airlines (NYSE: UPS) and US Airways (NYE: LCC)

A group of ATA carriers signed a similar MOU this week with Rentech, Inc. (NYSE AMEX: RTK) for a future supply of synthetic jet fuel to be produced from fossil fuels with carbon capture in Mississippi.

AltAir Fuels’ renewable jet fuel and green diesel are to be blended with petroleum-based jet fuel and diesel at the Tesoro Anacortes refinery, and transported to Seattle-Tacoma International Airport and other locations through the existing pipeline system. The renewable jet fuel and diesel produced by AltAir Fuels will be fully compatible with the existing transportation fuel infrastructure, and will require no special handling. The fuel will be consumed by aircraft owned and operated by airlines who have signed the MOU, as well as heavy machinery operated at the Port of Seattle facilities.

Jet fuel produced from camelina has already powered two commercial aviation test flights–Japan Airlines and KLM–in 2009. In addition, the U.S. military has performed ground engine tests on camelina-based jet fuel in preparation for FA-18 Hornet fighter jet flights planned for spring 2010.

Boeing (NYSE:BA) is leading the ASTM Emerging Fuels Taskforce, which is working to gain the necessary approvals for bio-derived fuels for aviation. Approval is expected in 2010, with camelina becoming part of a portfolio of biomass sources used to create a sustainable aviation fuel supply.