The Collapse Of Oil Prices Has Killed What Little Serious Interest Airlines Ever Had In Biofuels

Source: By Dan Reed, Forbes • Posted: Friday, January 29, 2016

Just as bologna sandwiches don’t taste nearly as good when hamburger meat sells for 99 cents a pound, airlines are losing their taste for biofuels now that they can buy a gallon of conventional jet fuel for less than a buck.

Over the past 15 years there have been waves of interest in biofuels as industry leaders grew concerned about oil prices, global terrorism, economic weakness, environmental issues, sustainability and other big picture issues. Additionally, airlines – which always are sensitive to the rising and falling of public and political sentiments – have sought to position themselves as environmentally-concerned corporate citizens eager to make the jump to burning greener, cleaner biofuels rather than nasty-old carbon fuels.

For the most part, they successfully have nurtured that perception among the public even though in reality they have done little more than play around the edges of biofuel experimentation.

Airport worker Resky Killion is reflected in the wing overhead as he pumps fuel into an Alaska Airlines jet Wednesday, Dec. 16, 2015, at Seattle-Tacoma International Airport, in SeaTac, Wash. Boeing Co., Alaska Airlines and the Port of Seattle announced Wednesday that they are partnering on a $250,000 study to explore how to bring more aviation biofuel to airplanes at Seattle-Tacoma International Airport. Executives for the companies and port signed an agreement, saying the study will help stimulate production of alternatives to conventional jet fuel. They say the longer term plan is to incorporate more biofuel into the airport’s fuel farm, which is used by all 26 airlines. (AP Photo/Elaine Thompson)

Now, though, with jet fuel – essentially kerosene – refined and sold on the U.S. Gulf Coast selling for as little as 85 cents a gallon, airlines no longer have any serious interest in biofuels. So don’t believe whatever biofuel-boosting statements they may continue to put up on their websites and into their news releases.

Here are three interrelated reasons why:

Biofuels Are Now, And May Always Be Too Expensive

When jet fuel cost more than $3 a gallon, and oil was over $100 a barrel and appeared to be headed ever-higher, it made sense for airlines to look into both their technical ability to burn biofuels in their planes’ jet engines as an alternative fuel and ways to improve the currently very limited supply of biofuels.  There probably never has been an airline executive who would prefer burning carbon-based fuels over a cleaner, greener fuel – so long as prices are comparable. And over the last decade there’s been growing public and regulatory pressure on airlines to reduce their carbon and other emissions, further heightening airline executives’ interest in the development of biofuels. So there was some, albeit limited, natural desire in the industry to find an affordable alternative to conventional, carbon-based jet fuel.