This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.

With high fuel costs buffeting airlines around the world, the best hope for alternative energy for commercial aviation may be on the horizon.

The standards-setting body ASTM International is set to vote this summer on certification of hydrotreated renewable jet (HRJ) fuel.

Tests both in the laboratory and in the air (led by a most prodigious jet fuel consumer, the U.S. Department of Defense) have shown that HRJ can be processed from many types of feedstock—from weedy plants to animal fat—to make a fuel chemically identical to the crude-oil based kerosene that powers flight today.

"We know it's feasible and safe," said Lourdes Maurice, director of the office of environment and energy at the U.S. Federal Aviation Administration (FAA). "The hurdles and work that remain are ensuring that the environmental footprint is one of reduced greenhouse gases, and then, on the deployment end—ensuring the availability of the product."

Those logistical challenges will dictate how many of the world's air passengers will be flying on biofuel, and how quickly. But there's no question that the gyrations of the global oil market this year have caused aviation companies and their passengers to think about the burden of petroleum dependence, and its impact on the cost of jet travel.

Prices Take Wing

Unrest in the Middle East, especially in oil-producing Libya, has helped ratchet up global oil prices to levels not seen since their historic 2008 peak—but the pressure at times has been worse for jet fuel. When refineries are squeezed, they favor producing less jet fuel and more profitable products such as diesel fuel, which is in greater demand for trucking now as the economic recovery takes hold. The March earthquake and tsunami in Japan, which caused outages at three major refineries, also took some jet fuel off the market.

As a result, the price of jet fuel has risen nearly 50 percent over last year's price, and 30 percent just since the start of 2011. In the first quarter of 2011, jet fuel purchases made up 33 percent of costs for major U.S. airlines, surpassing labor costs (25 percent) as their single largest expense. Every penny increase in the cost of jet fuel makes a $175 million difference to those carriers' bottom line, according to John Heimlich, chief economist for the U.S. airline industry group, the Air Transport Association. So when the jet fuel price rises by $1, as it has done over the past year, it adds $17.5 billion to the carriers' costs.

The result has been losses or falling profits, despite increased passenger revenue this year. Carriers have responded with plans to idle older, less-efficient aircraft over the coming months, and they've also held out the possibility of service cuts. But the primary response so far has been to pass along those costs; the ATA says the average price passengers paid to fly one mile rose 11.5 percent from a year ago, to 16.75 cents. And additional increases are likely. "The way they are leaning is, 'Let's see if the customer can help us with our higher cost of doing business, and if not, we're going to have to trim,' " Heimlich said.

Stamp of Approval

But aviation is making an important step in breaking free of its petroleum dependence through biofuel.

The ethanol that is typically used in cars—fuel alcohol refined from grain or sugar cane—would not work in aviation, at least with today's jet engines, because its energy density (the power it packs per gallon or liter) is too low. But numerous start-up companies around the world have been working with a very different fuel derived from oils that have been extracted from plants, animal fat, or grease. The oils are treated with hydrogen to produce HRJ, synthetic kerosene that is chemically the same as jet fuel. Only carbon dating would reveal that it is not made from fossil fuel.

Honeywell's UOP, based in Des Plaines, Illinois, a leading licenser of the HRJ technology, says one of the benefits of the process is its feedstock flexibility. Companies are making HRJ with the oily seeds of camelina, a relative of the mustard plant, and from the weedy jatropha plant. Animal waste fat and algae are also considered potentially abundant sources of oil. Start-ups are striving to show that they can produce aviation biofuel from inedible sources (thus, avoiding competition with food—one of the criticisms against corn ethanol) on land that will not reduce acreage for agriculture or forests.

Making sure the alternative fuel actually reduces carbon dioxide emissions will be crucial in gaining acceptance. Another synthetic fuel was certified for aviation in 2009, but that alternative—produced by the so-called Fischer-Tropsch process developed in Germany prior to World War II—often relies on fossil fuel feedstock (coal or natural gas). Biomass also can be used to make F-T fuel, but the process is energy-intensive. The capital costs also are high.

That's why the aviation world has been awaiting approval for HRJ, since the anticipated cost of the processing facilities is much lower.

Certainly debate is ahead on the land use impacts of varying feedstocks, and which biofuel will prove the most environmentally sustainable. But that discussion can't truly get off the ground until it is certain that HRJ can be used in commercial aviation. That's why this summer's vote on certification by standards-setting body ASTM International is key. Aviation regulators around the world require such certification before HRJ can be used in flights carrying passengers.

A panel of experts on fuel is scheduled to meet in June to consider HRJ, and if they vote to approve—as expected—the question will go to the entire ASTM body for voting later in the summer.

The ASTM fuels panel considered HRJ in December, but members who represented engine manufacturers voiced concern over some of the test results. Retesting earlier this year showed that the problem in the tests was due to contamination of the test sample. Earlier this month, at a meeting of aviation technical experts, the companies that voiced concerns indicated that they were now prepared to vote to certify, said Jim Rekoske, vice president and general manager of renewable energy for Honeywell's UOP. The Commercial Aviation Alternative Fuels Initiative—which represents airlines, airports, others in the aviation industry, and the U.S. government—anticipates the same timeline.

Only when certification is complete will companies be able to build biorefineries capable of producing substantial quantities of renewable jet fuel, Rekoske said. "It's difficult as an investor to invest in a project to create a fuel that's not certified for use," he explained. "Many of the projects have been waiting for moment of certification, because now they become bankable."

After certification, Rekoske says he expects airlines will vie to be the first to offer biofuel flights. Lufthansa, for example, has planned trials with an Airbus A321 on scheduled commercial flights on its Hamburg-Frankfurt route. Brazil's TAM also has planned biofuel flights between Sao Paulo and Rio de Janeiro.

The logistics of moving alternative fuel into the skies may actually be simpler than the challenge of getting it on the highways. In the United States, fueling for 90 percent of commercial aviation takes place at just 40 airports, says the FAA. As a "drop-in" alternative, HRJ can be transported in the same pipelines that now carry jet fuel. (In contrast, cars and trucks are fueled at tens of thousands of service stations, and ethanol cannot be mixed in gasoline pipelines.)

Military Demand

Some of the most important test flights that helped prove HRJ's viability were conducted by one of the world's largest consumers of jet fuel, the Pentagon. In its most recent biofuel test in March, a U.S. Air Force F-22 Raptor successfully flew at supersonic speed from Edwards Air Force Base in California on a 50-50 blend of HRJ and petroleum jet fuel.

View Images Fiscal year 2009 data from U.S. Department of Energy

The U.S. military views development of alternatives as a security imperative, and a means to reduce reliance on petroleum-based products, given that the U.S. Defense Department has used 3.8 billion gallons (14.4 billion liters) of petroleum jet fuel annually over the past three years. Jet fuel, used not only in the air but on the battlefield in tankers, generators and weapons systems, accounts for 46 percent of the U.S. government's energy use. The military is partly insulated from price swings, because its purchasing agent, the Defense Logistics Agency Energy, uses fixed-price contracts with economic price adjustment clauses. Still, DLA Energy has seen a 21 percent increase in the average purchase cost of petroleum fuel from December through March of this year.

The Pentagon's push for biofuel is important for spurring alternative fuel development for commercial aviation, because the military can create guaranteed demand that producers need to attract investment to build biorefineries large enough to produce HRJ at a competitive price. As high as costs have soared for petroleum jet fuel, HRJ is sure to be more expensive until production ramps up to large scale.

Chris Tindal, director of operational energy for the U.S. Navy, speaking at the biotechnology industry's World Congress last week in Toronto, Ontario, said the service's biofuel needs will rise as it works toward a goal of meeting half of its energy needs with alternative sources by 2020. For its planned "Great Green Fleet" demonstration of alternative fuel ships and aircraft, the Navy will order 4,000 barrels (168,000 gallons/645,950 liters) of renewable jet fuel by next year, and ten times as much by 2016, he said.