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AltAir Fuels and 14 airlines sign biofuel MOU

Fourteen airlines and alternative fuels producer AltAir Fuels have entered a memorandum of understanding to negotiate the purchase of roughly 50 million USgal (189 million litres) of bio-derived jet fuel per year to be produced by the Seattle-based company.

Participating airlines include Air Canada, Alaska Airlines, American Airlines, Atlas Air, Delta Air Lines, FedEx, Hawaiian Airlines, JetBlue Airways, Lufthansa, Mexicana, Polar Air Cargo, United Airlines, UPS and US Airways.

The memorandum comes as approval of commercial production and use of up to 50% blends of bio-derived generic synthetic paraffinic kerosene (SPK), called hydrotreated renewable jet (HRJ), is expected by 2011.

Led by the Air Transport Association of America (ATA), the memorandum is the second airline alternative fuels announcement today. AirTran Airways and all of the carriers involved with AltAir, except Hawaiian and Alaska, inked a memorandum of understanding with synthetic fuels producer Rentech to develop a framework for a future supply contract for roughly 250 million USgal per year of SPK derived from the Fischer-Tropsch process. Rentech intends to produce the fuel at its proposed production facility near Natchez, Mississippi.

The AltAir memorandum covers camelina-derived HRJ SPK that AltAir intends to produce at a new refinery in Anacortes, Washington using refining technology developed by Honeywell subsidiary UOP and camelina sourced from Sustainable Oils, a producer of camelina oil and camelina-based biofuels.

The new refinery will be built adjacent to an existing Tesoro oil refinery, and the AltAir facility is scheduled to begin production in 2012.

Initial discussions have been held with Washington state officials, regulators and permitting agencies, the AltAir spokesman says of the forthcoming facility.

The HRJ SPK will then be blended with petroleum-based jet fuels at the Tesoro refinery and transported to Seattle-Tacoma International airport and other locations through the existing pipeline system.

AltAir intends to produce about 50 million USgal per year of HRJ SPK, which is expected to replace about 10% of the petroleum-based jet fuel used at the Seattle airport by the 14 participating carriers, an AltAir spokesman says.

While the percentage of HRJ SPK that will be blended with petroleum-based jet fuel has not been finalized, it will likely be between 8% and 10%, the spokesman says

The airline memorandum also covers camelina-derived diesel that airlines can use for diesel-powered ground equipment at the Seattle airport. AltAir estimates that roughly 25 million USgal of the alternative diesel will be produced per year at the Anacortes facility.

The AltAir announcement comes after voluntary standards development organisation ASTM International considered up to 50% blends of SPKs derived from the Fischer-Tropsch process and issued a specification for non-petroleum-based fuels, D7566, earlier this year. ASTM also approved the modification of the existing specification for aviation turbine fuel, D1655, to recognize fuels made with synthetic components.

ASTM could modify D7566 to include up to 50% blends of HRJ SPK as early as next year as the ASTM HRJ task force has been coordinating related research.

Balloting for such blends is scheduled for 2010 but 2011 is a "more reasonable goal" to add HRJ SPK to the D7566 specification, ASTM aviation fuels subcommittee vice chairman for emerging fuels George Wilson tells ATI.

The addition of HRJ SPK to the D7566 specification will enable commercial production and use of up to 50% blends of such alternative fuel.

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