Trying to make sense of where the aviation fuel market is going can make your head hurt, and we in the aviation press often don't help. Specifically, we continue to perpetuate the idea that Swift Fuel is a "green" renewable when, in fact, the company has plainly said that's just one possibility. Herewith are two examples:
In this video we aired in March during our Sun 'n Fun coverage scrub ahead to about 1:10 for the relevant point our source says Swift is a biofuel and green because it doesn't contain any lead. If that's true, unleaded premium at the corner Hess station must be green, too, because it has no lead. I filmed this report myself, heard the biofuel statement and neither challenged nor clarified it. Thus goes modern journalism, where we use the excuse of lack of time to let statements we suspect may be misleading slide right by to be taken as factual by the reader or the viewer.
In this report from AOPA's recent coverage of Aero Friedrichshafen scroll ahead to about the 2:55 mark the reporter goes beyond leading the witness and just flat out states that Swift is made from biomass. Swift's Jon Zuilkowski replied that Swift can be made from biomass, but if you listen critically, he doesn't say precisely that it is or has been. He talks about estimated yields from various crop sources in a theoretical sense because, in reality, Swift hasn't carried or proven the biomass-to-fuel process end to end at a large scale. It has produced small quantities for test purposes straight from raw sugars, but just a few gallons. (He also misspeaks on yield, saying that a bushel of sorghum produces 100 gallons of Swift Fuel; he meant to say a ton of sorghum, I suspect. I asked him about it, but he said that's not Swift's area of expertise. It's being done by others.)
The larger volumes of Swift fuel for aircraft testing have been produced with off-the-shelf chemicals that aren't bio-derived. Swift recently reported that it's just now engaging companies to prove out the biomass economics at a larger scale from various crop sources. To its credit, Swift has generally explained this accurately, at least to me. But if a reporter doesn't ask the right questions, he or she is left with the impression that Swift is a biofuel when, in fact, it's more reasonable to say, as Zuilkowski did, that it could be a biofuel. The difference is neither subtle nor unimportant for its price as a biofuel will hinge on processes that Swift is not doing.
Swift has been less consistent in its cost estimates. For example, in the AOPA report, Zuilkowski says the partner companies they have engaged estimate that they can produce Swift Fuel for half the production price of 100LL. This is a tall claim that I am skeptical of for a number of reasons. First, what production price are we talking about?
At the refinery gate, avgas has been as low as about $2.50 not so long ago, but now it's more like a buck above premium car gas, so call it in the mid $4 range, according to my refiner sources. Just as a handy guide, to thumbnail price refinery gate gasoline prices, start with any index crude you'd likesay West Texas Intermediate or Brentdivide by 42 and add 30 percent to get to premium car gas. Add another buck for avgas.
But using it as a benchmark, half would be about $2.25 to $2.50 out of the refinery, which is about a dollar less than premium car gas is now. To give you a frame of reference, according to the U.S. Energy Information Administration, the well-established ethanol industry with benefit of considerable economy of scale, struggles to make ethanol at $2 a gallon and that's with a 45- cent-a-gallon government subsidy. A bio-derived Swift fuel requires a more difficult and unproven cellulosic process to reduce biomass to sugars, then bacteria to make the sugars into acetone, Swift's basic feedstock. Swift has been clear that its work has centered on the acetone-to-fuel conversion process, not the equally critical biomass-to-acetone conversion, which it's leaving up to other companies.
It's always possible that Swift's contractors have made huge breakthroughs, but I'd like to see these before accepting the claims at face value. In the ethanol market, cellulosic technology has been intensely hyped, but so far, it's been a bust. The EPA has backed off on its goals for cellulosic ethanol as a gasoline blendstock. "Half-price" fuels suggest near order-of-magnitude improvements in efficiency and yield. Renewables are making progress, to be sure, but we're standing by to see if they've made these kinds of gains. I'd never say never, but I would say: show me.
In this podcast last year, Swift's David Perme told me he thought Swift Fuel could achieve a retail price point between $5 and $6 if it used acetone feedstock derived from natural gas. As has Zuilkowski, Perme said most of Swift's work has centered on the end-state technologythe task of converting acetone into one of the binary components of Swift Fuel, mesitylene, which is blended with isopentane to make the finished fuel. Perme's numbers were based on petrochemically derived acetone because those economics are easier to pin down.
So it seems to me that the right way to think about Swift is as a binary fuel derived from acetone feedstock and not as a biofuel. The acetone can be bio-derived, but if it is, it will have to compete with petrochemically produced acetone whose prices have proven wildly spiky due to variable demand in the plastics industry. Acetone squeezed from sweet sorghum won't be insulated from that nor does it seem likely that enough of it will be produced to impact world commodity prices for this material. In other words, unless Swift segregates its ultra-cheap acetone from world commodity prices, its investors won't want to leave any money on the table just for the good of aviation.
But we'll see.
I follow the energy markets loosely, both because it's a personal interest and because it relates to avgas. Last month, this minor chemical industry news item caught my eye: Dow plans to construct a "world-scale" propylene production facility at its Texas operations for a start-up in 2015. Why is this of interest? Because propylene is the primary feedstock for acetone, which Dow is evidently bullish enough on to take a run at the global market. One reason they are doing this is because the Marcellus Shale formation in Pennsylvania and the Eagle Ford shale in Texas are spewing out massive volumes of natural gas and related products, with yields expected to increase, with predictable effect on prices. Propylene can come from natural gas liquids, but the shales don't have much of that. Dow evidently has technology to make shale-derived gasses a player in this market.
So that means renewable sorghum-produced acetone may have to compete with a great gush of propylene-derived acetone. When Swift gets around to attracting investors, they'll no doubt take notice of this and won't have much choice but to pick the cheapest acetone they can find. That might be bio-acetone. Or not. It will be interesting to see how it plays out. To the Swift process, it doesn't matter where the acetone comes from.
In the meantime, Swift continues its research, tweaking its process and testing the fuel. ASTM approval for its fuel is near completion, a real plus. The company gives regular updates at the major shows, with AirVenture up next. They freely answer questions from the audience and I encourage you to ask the right ones. We in the media don't always do that.