Friday, 23 December 2011

New aviation biofuels - a major breakthrough?

Back in October, there was a wave of publicity hailing a major breakthrough in development of alternative jet fuel. Virgin Atlantic announced that it was working in partnership with two biofuel firms, Lanzatech and Swedish Biofuels, pioneering a process to produce jet fuel from waste gas emissions from steel plants. Carbon monoxide (CO) from steel plants, usually flared off as carbon dioxide, contributing to greenhouse gas emissions, are being compressed and converted into fuel. A pilot project is underway in New Zealand, a demonstration plant has been commissioned in Shanghai, commercial operations are scheduled to commence by 2014, with the fuel initially used for flights from Shanghai and Delhi to London. Sir Richard Branson, President of Virgin Atlantic, stated that the technology could be applied to 65 per cent of the world’s steel mills, and could also be applied to aluminum and cement plants.

This project promises to capture greenhouse gases from industry, and that would be a positive move, a step change in green technology. So far, there has been a lot of talk about this, but little action, and new power plants and factories, including metal plants, are being built without this technology. But another aspect of the project, the production of biofuel from waste gas seemed not just a truly miraculous breakthrough, but too good to be true. So I tried to find out about the firms involved and the actual process used to make the fuel. It appears that my hunch might be correct, that, although the biofuel might incorporate these waste gases, an input of biomass, living material, is also required.

Virgin Atlantic’s announcement on the People and Planet section of the firm’s website states that: ‘The process involves waste gases from industrial steel production being captured, fermented and chemically converted’. There is a video showing a schematic of the fuel production process.  



Blink and you’ll miss it, but, at the beginning, along with the waste gases, a biomass or MSW (municipal solid waste) input is shown. This indicates that, in addition to the waste gases, biomass is required to make the fuel. Virgin’s repeated description of the new fuel as biofuel (my italics) certainly implies that living material is involved in its production. If a biofuel does not contain biomass, then it is not a biofuel.

If biomass is being used, the new biofuel does still demonstrate progress, in the form of non-food biofuels. Most current biofuel crops, most notably corn and palm, displace food crops, contribute to rising food prices and world hunger. But with any biomass input, I would be sceptical about the airline’s claims that: ‘This next generation technology overcomes the complex land use issues associated with some established biofuels.’ The new project sounds like a major step forward from Virgin’s first biofuel test flight in 2008, which was partially powered by oil from coconuts, and babassu which is used as cooking oil. But, the use of any type of biomass to make fuel, even a non-edible feedstock, still has a land use impact. Even if the biomass input is MSW instead of a crop, the description of these inputs as ‘waste’ can be a lazy catch-all for kinds of materials, such as wood, food and garden waste, which could be diverted from the waste stream and used for another purpose other than burning as fuel, recycled, re-used or composted.

Sir Richard Branson promoted the new fuel initiative with his usual ambition and optimism, saying ‘I think this is the most important announcement that I've made in my lifetime’. In the video, he says the airline and its project partners are turning CO into jet fuel, there is no mention of any other input to produce the fuel. He said that the project will mean the airline can not just meet, but exceed, its pledge of a 30 per cent carbon reduction per passenger kilometre by 2020. Achieving this will depend on dramatically scaling up the demonstration project, and with growing evidence that greenhouse gas emissions from some biofuels are worse than fossil fuels, for example a 2010 study by nine European environmental groups, it is vital that the entire production process for new biofuels is subject to scrutiny. Virgin says that the fuel promises a 50 per cent reduction in greenhouse gas emissions compared to conventional kerosene, based on a lifecycle analysis, so I suggest making that research available. The announcement, and Branson’s blog, invite you to find out more on a website called Change is in the Air, but the links don’t work.
If the reporting of this new biofuel fuel project has been sloppy and inaccurate, if there is a biomass input to the new fuel, it is spreading scientific illiteracy. The distinction between a biofuel production process which involves waste gases, and a biofuel which is made from waste gases is an important one. Implementation of new technologies must be based on reality, not partial information which suggests that the quest for sustainable alternatives to fossil fuels is more advanced than it actually is. This leads to falsely reassuring notions that seemingly intractable problems have been resolved, so we can continue with industry as usual, including uncontrolled aviation expansion, and everything will be OK. I do see value in Virgin’s positive attitude. Nothing major is ever achieved without enthusiasm, a vision for a better future, the willingness to take risks, over-reaching yourself. But optimism needs to be balanced with hard-headed critical analysis. We have to face up to the barriers which remain, to put the problems out there for open debate, in as much detail as the achievements and the potential.

In the US, Lanzatech, one of Virgin’s partners in the project, has been granted $3 million from the FAA for another biofuel project, which was announced at the beginning of December. Green Car Congress outlines the fuel production process in some detail, and it is clear that there is a biomass input. It explains that, in addition to gases emitted by industry, ‘synthesis gas derived from lignin, a byproduct of cellulosic ethanol’ will be utilised to create the new fuel.

Lignin is part of the cell walls of plants. It is inedible and the supply is potentially abundant. It is easy to source lignin, but will it be possible to scale this project up, to source sufficient quantities of lignin which is a byproduct of cellulosic ethanol production? This depends on a dramatic breakthrough in cellulosic biofuels, and the indications are that this is not on the horizon. Maybe there are some wildly successful cellulosic projects I don’t know about, which could supply the lignin, but I doubt it. So far, scale production of cellulosic biofuel, from the non-food components of crops, such as husks, stalks, straw and corn stover, has proved disastrous in the US, as shown in this article in Wall Street JournalThe Cellulosic Ethanol Debacle. Congress mandated the purchase of 250 million gallons in 2011, from sources such as woodchips, stalks and switchgrass. Only 6.6 million gallons were actually produced. The mandate was for more than 37 times the volume of cellulosic fuel which was actually produced.

The ‘half dozen or so companies’ which received subsidies to produce cellulosic fuel have failed. One firm, Cello, declared bankruptcy in 2010. Grants were given to Cello in spite of the fact that it had not built a plant, or even proved that it had the technology to produce cellulosic biofuel. In 2009, a civil fraud case ruled that Cello had lied about how much cellulosic fuel it could produce. Some of the fuel Cello showed to investors was derived not from plants, but from petroleum. WSJ summed it up as: ‘Congress subsidized a product that didn't exist, mandated its purchase though it still didn't exist… and is now doubling down on the subsidies in the hope that someday it might exist.’

Yet, the US government continues to bankroll cellulosic biofuel projects. Government funding for research and projects to develop and prove the technology would be the sensible way forward, but, again, the grants assume that the technology will work and firms are contracted to supply considerable amounts of fuel. In September the federal government loaned Abengoa Bioenergy $134 million to build a cellulosic plant in Kansas, forecasting is that this will produce about 23 million barrels a year. POET, which advertises itself as the ‘world's largest ethanol producer’, was awarded a $105 million loan guarantee for cellulosic fuel by the Department of Energy.

Only two days ago, Gevo, a firm which received millions of dollars from the US government to develop fuels made from cellulosic materials such as grass and wood chips, announced that producing fuel from these sources is too expensive. So, Gevo will be using corn instead, and will retrofit its plants to make butanol instead of ethanol. Along with supplying butanol for the chemicals industry, Gevo has been contracted to produce 11,000 gallons of jet fuel for the U.S. Air Force for test flights.

Yet Gevo is one of the beneficiaries of the recent FAA grants for aviation biofuel, Gevo is to supply the biofuel for a Honeywell OUP project, and stated that the biofuel ‘can be produced from a variety of starch and sugar feedstocks, including corn’. Funding has been awarded to a project which merely holds out the possibility of inedible feedstock, with UOP stating that: ‘In the future, inedible sources, such as corn stover, bagasse and wood residues, could also be used as feedstocks.’ But, in the meantime, more US taxpayers’ money is has been handed over for aviation biofuels which compete with food supplies. Funding should not be used to contract supply from unproven technology. Funds should be dedicated to research and demonstration projects to prove, and improve, the technology for new biofuels.

Friday, 9 December 2011

We’ve been Trumped

Multi-billionaire Donald Trump began flying around in an especially ostentatious new plane in 2010. The plane’s fuel tank has a capacity for over 36,280 kilogrammes of fuel. That’s a hefty carbon footprint for flying just one businessman, his wife and a few mates around. This video gives an inside tour, (preceded by a car advert, sorry about that). 



It’s a refitted Boeing 757, which would normally seat 43 passengers. There is a boardroom, work desks, big flat screen television, a bedroom with ample closet space, a posh loo. There is gold plating everywhere, a shower with gold plated taps, and gold leaf on the seat belt buckles. The Trump name is emblazoned on the fuselage, the white seats, and all over the fittings inside. Trump’s vast wealth and private plane makes him one of the beneficiaries of US tax breaks to private jet owners. These tax breaks have continued under the Obama administration, and helped the private jet industry recover quickly from the economic downturn.

Trump has already made several flights to Scotland in his Boeing 757, where his $1 billion golf resort development on the coast of Aberdeenshire is underway. Along with the 18-hole golf course, with ambitions to be the ‘world’s greatest golf course’, the development includes a luxury hotel and 500 luxury homes, all requiring an access road. Vast swathes of natural vegetation are to be replaced with a monoculture of short grass, and residents of Menie have been subjected to compulsory purchase and are faced with threat of forced eviction. This is documented on the website Tripping Up Trump, which likens the development to another round of highland clearances. I can’t wait for local screenings of this documentary You’ve Been Trumped, which won an award at the 2011 Hamptons International Film Festival. This is the trailer. The intimidation of local people looks horrendous.




Aberdeen
Airport
is near the resort, and
Trump has backed expansion, adding 124 metres to the northern runway. The runway extension opened in October, and the airport predicts this will help generate an additional 205,000 passengers by 2015. The airport and the golf resort are tightly intertwined in the area’s official tourism strategy. This is myopic and risky, putting too many eggs in one basket. Whilst, aviation remains a growth industry and traffic levels are predicted to increase further, traffic projections for individual airports are notoriously unreliable. Spending millions on vast swathes of concrete to accommodate flimsy growth predictions is a poor bet to boost tourism, jobs and other economic activity. Aberdeen Airport has a major role supporting the oil and gas industry, so will be casting around for new markets as the last dregs of the North Sea deposits are extracted. But banking on Trump’s gold resort is clutching at straws.

Aside from the negative social and environmental impacts, of the airport expansion and the Trump development, the economic viability of the resort is likely to be affected by the low light levels, cold, rain and wind in the long winters. Golf enthusiasts, particularly the wealthy people that this resort is targeting, will have the option to jet off to golf courses in warmer climates. Nevertheless, the Scottish Centre for Tourism said that the new air routes and the Trump development would combine to attract people to the Aberdeenshire area. In 2010, Aberdeen Airport was in talks with no less than 22 airlines, for long haul and short haul routes. China and Russia are expected to be key markets for to attract rourists to Trump’s golf resort.

Trump has been using his money and influence to block more positive developments anywhere in the vicinity of the golf resort. He opposed a wind farm next to the site, 11 turbines off the coast in Aberdeen Bay, complaining about spoiling beautiful coastal countryside. The development still might go ahead in spite of criticism from him and other opponents. Yes, wind turbines can endanger birds, and they do have a visual and noise impact on the environment, but it’s offshore so residents won’t be too badly affected. With North Sea oil running out, ambitious, admittedly imperfect, innovations in renewable energy are vital. Trump even objected to a proposal for a cats and dogs home in the area. Meanwhile, the golf resort is scheduled to open next year.

Whilst lobbying for runway expansion to inflict more aircraft noise on people living under the flightpaths of Aberdeen Airport, Trump took the opposite view when airport expansion threatened to affect his own quality of life. In 2010, he filed a suit against expansion of Palm Beach Airport, attempting to block plans for a new commercial runway. The public statement was that the suit aimed to protect Palm Beach County citizens against noise, but the lawsuit also reflected his personal interests as it attempted to prevent planes from flying over his Mar-a-Largo residence and club. Trump went on to complain about a proposal to disband noise monitoring equipment at several locations around Palm Beach Airport. The Federal Aviation Authority (FAA) held back on approving runway expansion, as traffic levels were not increasing, and not projected to do so substantially, and Trump dropped his lawsuit against the airport’s expansion in September.

Monday, 5 December 2011

Private jets and the 0.1 per cent

Private jets, symbolic of the further concentration of wealth among the most privileged 1 per cent since the economic downturn, are getting a bit of shtick from the Occupy movement in the US. This criticism is well founded. Private jet sales and usage are actually are actually growing, defying the downturn.

An article in Executive Travel Magazine states that the number of private jet flights in the US did reduce by 20 per cent in 2009, but, in 2010, there was a fast turnaround to growth, of 11 per cent. John Rosanvallon, chair of the General Aviation Manufacturers Association welcomed tax breaks which helped to secure this recovery of the industry, saying:
Flying hours are steadily on the rise, and there are two critical U.S. tax provisions in place that will help our industry recover. One is the extension of a 50 percent bonus depreciation allowance through 2011; the other allows companies to deduct the full cost of new planes from revenues.
President Obama has repeatedly criticised tax break for private jets, six times in a single speech in June, which could potentially bring in an estimated $3 billion to the treasury in a decade. He is talking the talk, appearing to support the 99 per cent who are paying for higher fuel costs for less glamorous travel in cars and buses, but the thing is, the tax break on depreciation was part of his own administration’s stimulus package.

As of 2010, there were 11,000 private jets in the US. Only a minute percentage of people, at the pinnacle of wealth, could afford to own one. A Wall Street Journal article explains that the cheapest new entry level jet costs $5 million, plus $500,000 per year in operating costs. The majority of jet owners have a net 'worth' of $100 million plus, and ‘earn’ at least $10 million a year. Only 29,000 US citizens have net worth of over $100 million. That is just 0.1 per cent of the population, a far narrower segment of the population than the wealthiest 1 per cent.

Not all users of private jets own the planes outright. For those not quite rich enough to own a private jet, or with other spending priorities, chartering one requires deep pockets, costing around $3,000 per hour. For many senior executives, the corporate jet perk, which can come in the form of a certain number flying hours, is an important component of their remuneration package. There is compelling evidence that use of a corporate jet is even more of a perk than realised, that the planes are used extensively for leisure. A Wall Street Journal analysis of FAA flight records between 2007 and 2010 showed that the planes make frequent landings at resorts where executives happen to have holiday homes, an indication that personal use of corporate jets far exceeded the level which was disclosed to shareholders: ‘dozens of jets operated by publicly traded corporations made 30% or more of their trips to or from resort destinations, sometimes more than 50%’.

The companies only provide sketchy information to the FAA about the purpose of the flights, and who was on board, but I’ll bet that a lot of the time the high flying executives are sitting on the beach, by the pool, playing golf or whatever. And all it requires is a few supposedly vitally important messages on blackberries and other gadgets, for it to count as a business trip. An attorney representing executives in negotiating pay packages claimed that it is difficult to distinguish between CEO’s work and leisure time, something that the rest of us couldn’t swing past employers and clients. We only get paid if we turn up when we have to, fill in time sheets, and deliver what we are contractually obliged to do.

Calling these planes ‘corporate jets’ or ‘business jets’ is often a misnomer, and its not just about being creative in how the use of the planes is presented to regulators and company shareholders. It’s about flattering executives that they are staggeringly busy and important, rushing around between supposedly vital meetings, that their luxury travel is vital for galvanising the economy. It’s much like so called ‘sports utility vehicles’, SUV’s, gas guzzling heavy vehicles which are mainly used for activity which has nothing to do with exercise. Driving one of the urban tractors is the very opposite of sport, and they are used for the same sort of journeys as regular cars, trips into town, shopping, school run, gym etc.

Internationally, there is further evidence that the richest 0.1 per cent are splashing out on private jets. Globally, there was a fall in orders for private jets in 2009 and 2010, but this was confined to the smaller models, mostly used by executives of small businesses which had been hit by the recession. In contrast, deliveries of the largest private planes, used by wealthy executives of big companies, grew by 13 per cent. Growth rate is expected to increase in 2012. The growth rate is higher in Asia, but this if from a much lower starting point than in the US. As of 2010, there were only 600 private jets in the entire Asia-Pacific region. Unsurprisingly, China is a key target market, with huge growth expected from just 100 private jets in 2010. Apparently, the marketing strategy is different from the usual process of persuading owners to start with a small plane and upgrade as their wealth accumulates. A representative of private jet manufacturer Gulfstream said that in China, once a new customer decides to make a purchase they will start out with a top if the line jet. People in China with private jets will number fewer than 0.1 per cent of the population, by a few decimal points I reckon, but these individuals will be wielding the heftiest carbon footprints.
 



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