If Oil Is Cheaper, Why Isn't Avgas Cheaper, Too?

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Earlier this week, as I was freshening the flowers in my patio shrine to Friedrich Engels, reader Will Alibrandi asked this perfectly reasonable question: If the price of oil has tumbled on the spot market, why hasn't the price of avgas come down?

The short answer is it has, you just haven't seen it yet. Or maybe it hasn't. It just depends. Is that confusing enough? If so, I apologize, but getting a handle on how the pricing of avgas works is like rounding up ball bearings with greasy gloves on. But as it happens, I did some research on this last week and can at least offer an informed opinion.

You've probably noticed that avgas prices tend to be less volatile than mogas prices, which sometimes seem to change once a day or more. There are several reasons for this, according to a distributor I know in the avgas business.

The single largest seems to be that avgas isn't traded as a commodity so there's no reported national price point for it. It is pegged to the price of premimum unleaded, but refineries treat it as a boutique product, they don't make much of it (compared to mogas) and, because they traditionally operate as self-contained business units, they set prices at will. That's one reason why avgas is more expensive—there's just less market-wide competition and with no readily available price point, refineries are free to set market-will-bear prices.

But two other factors figure in higher costs. One is the expense of buying and handling the tetraethyl lead used in avgas (plus other additives) and the other is transportation, which is either truck, rail or barge for avgas. Because of the lead and low volume, most pipelines don't handle avgas and pipelines are the most efficient way to transport anything that will flow through them.

But it's a different story with mogas and with Jet A. Both are traded on the New York Mercantile with prices on current contracts reported every day. Refiners, distributors and retails are therefore free to adjust prices accordingly and they generally do, which explains why the price of regular at the corner gas station goes up (and down) a dime over night. It has less to do with what the retailer paid for the gas in his tanks than what its perceived market value is at the moment. The more volatile the market—as it was this summer—the more often prices change. Mogas prices seem to fluctuate more readily upward than downward and part of this has to do with volume. A busy service station may take several loads of gas a week, all at different prices.

Avgas tends to be more price-stable because if an FBO buys a load at a certain price and sets his margin—say $1.25 above wholesale—he's likely to retain the price until he buys the next load. "But these little airports have to be careful," one fuel distributor told us, "because if they don't move up with the market swings they can be behind enough not to have enough money to pay for the next load."

As of late September, my distributor source told me 100LL was wholesaling on the east coast for $4, including delivery and taxes. As of this weekend, the refinery price dropped to $3.50 in this region, although it's different elsewhere, I'm sure. That means the cheapest avgas retailers are seeing margins of about a buck to $1.50, compared to 15 cents or a little more for mogas retailers, before credit card and other fees. Sounds like a lot, but for many FBOs, avgas sales are the only revenue and as prices rise, sales decline. But FBOs still have to pay the bills and the cost of doing business on an airport continues to rise. So let's not beat up on the FBOs too much. Being in that business has always been tougher and it's not getting any easier.

Oh, and the-we've-got-plenty-of-oil argument surfaced again this week in our little blogosphere, as it always seems to. Reader Samuel McCauley, who identifies himself as a "life-long oil man" raised the issue. The basic argument is that if the regulators would just get out of way, the U.S. is sitting on hundreds of years worth of oil. It's actually not hard to support this argument in some way with genuine facts. Google around a little and you'll find competent writing on the subject, much of it centered on vast shale kerogen deposits in Colorado and other intermountain states, plus offshore deposits on the coasts, which are more iffy. I've been covering this since the 1970s and for just as long, the oil industry has been arguing about the size and economic recovery of these reserves. At some point, they do become economically recoverable and with as much as a trillion barrels in estimated shale reserves, the total makes Saudi Arabia look puny.

Unfortunately, both the technology and economics of large scale shale oil production remain unproven and will probably remain so for a decade, at least. Even if regulators stepped aside entirely—something I'm not sure the public really supports at this juncture--that will still be true. Meanwhile, the elephant in the room is 20 million barrels of U.S. consumption a day, 12 million of it imported. Just for reference, the U.S. imports about 2 million more barrels than Saudi Arabia produces each day. If we made Saudi the 51st state, we would still have to import oil.

That's why I remain convinced that until shale, tar sands and new offshore reserves come into play (if they ever do), a sustained effort to improve vehicle efficiency—something that's readily within reach—is the only short term solution that can make substantial gains. But before we can even consider that, we have to at least be able to have a civil conversation on the subject. Thus far, that has eluded us all.

Comments (45)

Paul, I think the conversation has been entirely civil.

And I think there is plenty of natural gas, nuclear, and yeah even oil to supply the US' needs for many years.

But for some reason, likely a political reason we are not using our own resources. Environmentalists don't want nuclear even though it contributes zero to global warming, climate change or whatever you want to call it. Environmentalists don't want offshore oil drilling because it's not 100% safe from oil spills.

And look at the problems that attitude has caused. A huge transfer of wealth to other countries who don't particularly like us. Huge trade deficits and a constant pressure to conserve, even to suggesting we should ride bicycles and drive tiny cars with our knees in our chests, like they do in France and Italy.

As I said in the other post, this it America, it's a big country and we like that. It's entirely too big and spread out to ride buses to work for all but a small number of urban dwellers.

We have 90% of the general aviation worldwide here, and for good reason. Our freedoms, capitalism, it all makes this the greatest country in the world, and half the world wants to move here.

Avgas will be declining in price, it already has. If we convert our cars to CNG or maybe even cold fusion or hydrogen that will free up that petroleum for more and cheaper avgas. And that's great.

Posted by: Steve Waechter | October 15, 2008 12:08 AM    Report this comment


Kudos for your determination on this issue. Throughout all of the arrogant, short sighted, and ignorant responses from the last blog you stay on track and even keep a sense of humor. Friedrich Engels...Ha!

Americans will not change energy policy until they are forced to by terrible circumstances. The underlying problem (as I see it) is that we are a nation controlled by emotion not logic. Not that logic isnt occasionally used, its just that at the end of the day emotion rules.

Posted by: Brad Vaught | October 15, 2008 7:46 AM    Report this comment

I think Brad has an excellent point. We as a nation are controlled by an emotion...fear of the "what ifs". What happens if we drill off the coast and spill some oil? What happens if we have a radiation emission from a nuclear plant?

Unfortunately the media breeds these fears. Through the mainstream media and through the multitude of other outlets, we frankly scare ourselves away from most things that are worthy of our attention.

I'm sure Orville and Wilbur considered "what if we crash?". What if that kept them from trying? I imagine Henry Ford also had some "what ifs", but did they keep him from going out on a huge economic limb and developing the automobile?

Point is, until we as a nation turn these "what ifs" into "how can we mitigate these risks", we will fail and other countries will thrive.

When we actually mitigate these risks and don’t let them prevent us from trying, we can have truly clean and cost effective energy.

Posted by: Jeff Zimmerman | October 15, 2008 9:17 AM    Report this comment

Steve Waechter says "I think there is plenty of natural gas, nuclear, and yeah even oil to supply the US' needs for many years."

Unfortunately, all the strategies he espouses have one weakness: even if all the environmental issues are set aside, none of his solutions can be implemented in less than about 10 years.

All oil experts agree that you don't sail out to offshore locations, drive a well, and start pumping -- it takes years of prospecting and analyzing before you can start drilling exploratory wells and more years before you see real production. The same is true of recovering oil from shale oil, only more so because the technology to recover that oil without using a large portion of it in the recovery process simply hasn't been developed yet. Similarly, siting, building, fueling, and starting a nuclear power plant realistically takes close to 10 years.

As for his contention that "this is America, it's a big country and we like that. It's entirely too big and spread out to ride buses to work for all but a small number of urban dwellers," he hasn't researched his statistics. As of 2005, 80.8% of the US population lived in cities or suburbs, well within range of public transit.

But expanding public transit is also a long-term solution. Which means that the only viable short-term mechanism for reducing our dependence on oil is conservation, either by driving less or implementing existing technologies like hybrids that can be made quickly.

Posted by: Jonathan Spencer | October 15, 2008 9:53 AM    Report this comment


From what little I know, I can't argue with your 10 year timeline. But it irritates me that so many people use that as an excuse as to why these ideas won't work. I believe we were discussing these things well beyond ten years ago, so if we had done something about it then we would be well positioned today.

We need to get beyond the short term mentality that we as Americans have developed and start planning long term strategies all the while continuing to do what we have to do in the short term such as hybrid technology, etc. Even if hybrid and hydrogen technology are the answer for the long term, I think it's important enough to have a long term "plan B" as well.

Posted by: Jeff Zimmerman | October 15, 2008 10:26 AM    Report this comment

8 years ago Al Gore argued against more drilling. Now 7 years later with gas at $4.00 a gallon, Obama makes the exact same argument! Is there nobody in Congress who can legislate for our future as opposed to some "quick fix" that means nothing? Over 80% of the US oil reserves have been banned from drilling by Congress! Is it any wonder these clowns have an approval rating lower than used car salesmen?
Here is an ingenious thought, mandate Hydrogen pumps at all gas stations to appease the "no-drillers," require auto makers to build these cars after a certain percentage of the fuel is available and allow drilling to appease those who want to plan 7 years in advance so that we will not need to import a single barrel of oil. The Hydrogen cars can be made right now (Ford, GM, BMW and Honda could mass produce them right now), but you can't buy hydrogen to go anywhere. It uses not a single gallon of gas and is pollution free.
This would mean no trade deficit due to exporting dollars for oil, no money for Iran to build nuclear weapons, no middle east fighting over oil issues, and no financing to terrorism through the use of our own money to pay for oil.
The Hydrogen cars drop our need for oil imports and the drilling allows us to use domestic oil for all our needs.

Total energy independence in 7 years. WOW! Too bad Congress is more interested in who wins the November elections and not the safety of our Country.

Posted by: RONALD MASON | October 15, 2008 11:48 AM    Report this comment

I just went online and checked my facts, yep, the price of 100LL in my area has droped 15 CENTS in the past 6 months after of course the oil went to $148 a barrel. The simple fact is that we are getting ripped off. Who is doing this? Everyone! From the refiner to the FBO all looking to make a BIG BUCK in the short term. They will in the end destroy the aviation business.

Posted by: RONALD MASON | October 15, 2008 11:50 AM    Report this comment

Some people in this great debate have demonized the oil companies. In the presidential debate tonight, one candidate, guess who, just mentioned tax breaks to Exxon Mobil in a time of record profits as an example of why he should be elected president. How many companies are in a business where the company's fundamental raw material is intentionally denied to it by the federal government? And then some people turn around and blame the companies for unreasonable pricing of their product?

Paul writes, about allowing oil companies to responsibly drill in domestic areas known to contain oil, "something I'm not sure the public really supports at this juncture". This is of course the same public whose knickers were in knots over $4/gallon mogas.

So which is it? Expensive mogas and avgas and zero effect on the environment? Or cheaper mogas and avgas with responsible effects on the environment? There is a choice, and it should be informed, but to date it is not.

Posted by: FRANK NATOLI | October 15, 2008 8:34 PM    Report this comment

Thanks for picking up on my question, Paul. I understood that 100LL is a boutique fuel, and the fact that it's made in relatively small amounts makes it more susceptible to market swings (I miss the days of $2 avgas!) I guess that means the rules don't apply when it comes to pricing and the recent decrease in mogas prices. Next issue? Why is diesel fuel so much more than gasoline? Here in CT I pay about .70 more for diesel. Just last summer diesel was .10 less than gas... what happened?

Posted by: Will Alibrandi | October 16, 2008 9:02 AM    Report this comment

Somehow the idea that we are not drilling for oil and gas in the U.S. gets touted constantly. Last year 40,000 wells were drilled in the U.S. Deep water offshore drilling is another matter however as rig costs up to $600,000/day and there is a substantial backlog for the few capable rigs, often over several years. The recent decline of oil prices makes this proposition less profitable and unless the price of oil reverses and stays high, there won't be much activity on that front. The same goes for the arctic as costs in that region are very high and require high prices for a long time to justify the large investment over the long time it takes to bring on production and transportation of product.

Posted by: Rip Sessions | October 16, 2008 5:22 PM    Report this comment

"Somehow the idea that we are not drilling for oil and gas in the U.S. gets touted constantly."

No, the "idea that gets touted constantly" is that the federal government is prohibiting oil companies from drilling for oil [and natural gas] where the oil companies know the oil exists. If there were no federal prohibitions on ANWR or Alaska offshore or California offshore or Gulf offshore or Atlantic offshore or Montana/Dakota Bakken field or Rocky Mountain shale, and oil companies said "well, we like the status quo, and we decline to drill in those areas" then a reasonable argument could be made that the oil companies were to blame for intentionally limiting supply. But no such reasonable argument can be made, because it is the federal government that is intentionally limiting supply, not the oil companies.

Posted by: FRANK NATOLI | October 16, 2008 5:34 PM    Report this comment

Yes, the federal government is limiting the supply to keep the prices up, so that those who are beholden to the environmentalist can make the case that the alternative fuels are now economically viable. Al "I invented the Internet" Gore, in a speech back in 2001, basically said that until gas hit $5.00 per gallon, there will be no incentive to seek alternative fuels. Guess what, we almost made it, but he forgot basic economics of supply and demand. Now that demand is down, prices are dropping, until supplies are further cut by OPEC and prices go back up. So, drill baby drill, build those nuclear power plants, and bring on the hybrids. Then tell OPEC to EAT their OIL!

Posted by: Richard Mutzman | October 16, 2008 6:29 PM    Report this comment

"Too bad Congress is more interested in who wins the November elections and not the safety of our Country", safety defined as government coercing the automobile industry and/or energy industry to convert to hydrogen powered vehicles.

Germany, with a significant "Green" Party, has seen BMW make huge investments in hydrogen powered vehicles, all apparently a practical dead end. It seems that the best intentions of the "Greens" cannot repeal the laws of physics and chemistry. One gallon of liquid hydrogen has only half the energy content of one gallon of good old C8H18 octane/gasoline. That means that the distance a vehicle can drive on one tank is at least halved, not even including additional reductions required by the tank insulation needed to keep the hydrogen liquid. At last report, there are two liquid hydrogen fueling stations in all of the Bundesrepublik, one near the BMW factory in Munich, the other some distance up the Autobahn.

Great idea! As long as you don't use the power of the federal government to overturn the laws of physics and chemistry!

Posted by: FRANK NATOLI | October 16, 2008 8:34 PM    Report this comment

If we continue to endure large deficits the only fix is to produce our own energy and stop the transfer of dollars out of our economy. Can you imagine the impact of a trade surplus, the US buck would soar and we could pay off the debt to other nations with a much fatter buck. Exports would be hurt but we could sure stand a change from China consuming our debt instruments and us praying they don't dump them some day.

Posted by: DONALD SHAPANSKY | October 16, 2008 8:35 PM    Report this comment


I agree with most of your post; however, two small words take 100% of your credibility away. Cold Fusion is a myth. Google It. A couple of quacks claimed to have found cold fusion in 1989 and since then many scientists have tried to reproduce the claimed effect without success. Cold fusion is considered a pathological science and will not be powering our cars. It is sort of a modern man's perpetual motion machine.

CNG shows promise especially in tractor-trailers and other heavy haulers responsible for the most consumption and pollution. However, lumping CNG with cold fusion gives it less credibility that it deserves.


Posted by: Matthew Kunkel | October 16, 2008 9:28 PM    Report this comment

Oil is HALF what it was 6 months ago when my fuel bill went up to 5.60 a gallon for 100LL. Why is the price now 5.45 a gallon??? Between the refiners and the FBO's they are killing flying.

Posted by: RONALD MASON | October 17, 2008 8:45 AM    Report this comment

Ron: you blame only the refiners and the FBOs? Government has essentially banned the construction of new refineries, but you blame the refiners, not the government? Even in my expensive New Jersey neck of the woods, FBOs at small private fields charge $1 to $2 less per gallon than FBOs at larger municipal owned fields, entirely because municipalities [governments] insist on their pound of flesh. But you blame the FBOs, not the governments? Your failure to understand the fundamental causality of high oil prices is why we have governments, local, state and federal, who delight in policies, regulations and statutes that are strangling general aviation today.

Posted by: FRANK NATOLI | October 17, 2008 8:54 AM    Report this comment

If you read my comments above, I believe 100% in a failed govenment policy, BUT if the price of a barrel of oil is 50% LESS than what it was 6 months ago, why is the price today still reflecting oli at $140 or more a barrel? Government is NOT making them keep the price up.

Posted by: RONALD MASON | October 17, 2008 9:16 AM    Report this comment

To those who cry that it will take 10 years to get new wells into production I would like to make 2 points.

Time - It seems the real time to production is less than 10 years. I am sure it will vary from site to site, but the Brazilian government is projecting less than 5 years from the onset of drilling operations. Their new production from fields under 400 meters of water will be coming on line in 2011. Seems that the time to production should be closer to 5 years than 10.

Get started - regardless of the length of time to production, it will never occur if you don't start.

100LL is a boutique fuel. The EPA has announced new lower standards for lead in the air and remarked that aviation is a large source of airborne lead. It is very important that then engine manufacturers ramp up their efforts to produce mogas compatible engines for the GA fleet ASAP.

Posted by: RAY DAMIJONAITIS | October 17, 2008 10:03 AM    Report this comment

Ray: even the L.A. Times has reported that capped California offshore wells could be brought online very quickly, far, far less than the ten year magic number used by carbon fuel demagogues. The Times has also reported that natural seepage from offshore deposits far exceeds any spill risk, and that exploiting the offshore deposits would reduce the seepage by eliminating the natural pressure.

As many commentators have noted, extending the "won't get anything for ten years so don't do it at all" to other forms of human endeavor would shut down all colleges, since you don't get your degree right away. And best of all, don't have any kids, because it takes at least twenty years until they're ready to be self sufficient.

Regarding the new EPA ruling, I haven't seen a definition of "significant source of lead" in the air. It may be that 100LL puts most of the lead in the air that is found in the U.S. It may also be that there is less lead in the air than hydrogen cyanide. But without the perspective of PPM, and thus its effect on humans, the phrase "significant amount of lead" is meaningless.

But that won't stop the government from costing general aviation hundreds of millions of dollars.

Posted by: FRANK NATOLI | October 17, 2008 10:20 AM    Report this comment

There is a difference in the way car gas and avgas is priced at the pump. Most gas stations set their price by what it will cost to replace the gas they have in the storage tank, where FBOs generally price their fuel according to what they paid for it. That usually makes avgas slower to go up when prices are rising and slower to decrease when prices fall. Unfortunately, most FBOs are stuck with a lot of fuel that they paid a high price for that they need to get rid of before they can buy a load of cheaper fuel.

Posted by: RICHARD JONES | October 17, 2008 12:31 PM    Report this comment

I don't think that we will ever see big bore aviation engines running on mogas. There are too many variables in mogas for these big high performance engines. I think that someday soon we will have unleaded avgas that has consistent octane, vapor pressure and additive content. Don't expect it to be any cheaper then 100LL.

If there is a consistent fuel, engines can be detuned to accommodate it with a small loss of power output.

With mogas, a complex control system must be used to constantly monitor the detonation margins and detune the engine accordingly, in the end we will end up with about the same power loss as we would get with a consistent fuel and fixed tuning.

Posted by: RICHARD JONES | October 17, 2008 12:58 PM    Report this comment

Oh, I know. I have seen it touched it and argued with George Braly about it. It is very expensive. Ask George how much he will get for the spark plugs, with the pressure sensor ports?

Posted by: RICHARD JONES | October 17, 2008 2:09 PM    Report this comment

I know but that being said that is an alternative. Last I heard they were trying to get the manufacturing costs down to make it more affordable. I wonder what the cost is right now if they were going to sell it. Running some quick numbers at $5000 it would take almost 9 years of flying 200 hours a year to make up the cost of the investment bases on auto fuel at $2.49 in Iowa and $5.35 being the average of 100LL in the state.

Posted by: DAVID KALWISHKY | October 17, 2008 2:46 PM    Report this comment

Exactly! I think you are a little low on the cost of the system. The pressure sensors alone are probably $1000 ea. I think $20,000 is closer to the mark, and I wouldn't be surprised if it was a lot more then that.

Posted by: RICHARD JONES | October 17, 2008 2:58 PM    Report this comment

Wow! That is alot!

Posted by: DAVID KALWISHKY | October 17, 2008 3:01 PM    Report this comment

The only solution for expensive petroleum products is to increase the supply of them. Conservation is the consumer's response to high prices. It is a poor substitute for an energy policy that focuses on increased production. Domestic oil production has been drastically suppressed by EPA regs. The price is there to support as much domestic production as we enjoyed in the 1980s.
The current high price of diesel is caused by the 2007 EPA mandate for low-sulfur diesel. Much of the high price of avgas can be attributed to increased transportation and storage costs for leaded fuel imposed by the EPA. I heard from someone at Stevens Aviation at BJC that 100LL is now trucked to Denver from Salt Lake City because EPA rules make it too bothersome to keep a tank full in any area tank farms.
All of the arguments against domestic production really are rationalizations by environmental extremists designed to limit the consumption of petroleum by making it scarce and expensive through the regulatory apparatus. Too bad so many who ought to know better fail to see through this tactic! These environmentalists will keep tightening the screws until we have to ride bicycles to work and use buses for long-haul travel. Don't accept the premises of the environmental movement because they're not based on science but rather serve the agenda of reducing our standard of living. Cf, the global warming (oops!, "climate change" now that it's getting colder for the past seven years)fraud.

Posted by: JONATHAN FULLER | October 18, 2008 9:07 PM    Report this comment

Ronald Mason claims that we should be producing hydrogen cars because they don't harm the environment and don't use a gallon of oil.

This is not correct. The vast majority of H2 is made from crude oil so it costs a fair amount of crude to make H2. One thing a refinery always watches is the hydrogen balance. H2 is released in many refinery processes and used in others. If there were a significant market for the H2 then the operation of a refinery could be modified to make some H2 available for sale but it still takes crude to make the H2.

Now, does that mean we shouldn't develop H2 cars? No, until the demand is there, it is unlikely that we will get lots of H2 production by more oil-free methods like electroysis of water, (which requires a lot of electricity). Just don't imagine that your H2 powered car is not using crude and has no environmental impact.

Posted by: Tami Morrison | October 19, 2008 9:34 AM    Report this comment

It just irks me whenever I hear people talking about hydrogen cars. They will never be a solution. Hydrogen is not a fuel; you cannot mine it or pump it out of the ground. It must be manufactured. It takes a tremendous amount of energy to manufacture hydrogen, and burning it in an internal combustion engine, with an efficiency of 30% at best is a poor way to use that energy. I have read articles that analyze the energy content of hydrogen by weight and volume. To have the same energy content as 30 gal. of gasoline would require a large trailer full of heavy compressed gas cylinders, or a large Dewar full of LH2. Hydrogen is just not very dense any way you store it.

It would be much more sensible to use the energy you were going to use to make hydrogen to charge batteries in an electric car, which can operate at efficiency greater then 80%.

Posted by: RICHARD JONES | October 19, 2008 10:43 AM    Report this comment

Only BMW is producing a car that actually burn hydrogen in an internal combustion engine today. Honda has the Clarity and Toyota the FCHV fuel cell cars in public trial which use hydrogen as a fuel source.

Hydrogen is easily produced via electrolysis. Water and electricity being the elements of the process there, or something like Honda's home fueling station which is a fuel cell producing electricity, hot water and hydrogen using natural gas as a source. Efficiency of a fuel cell is much higher than an internal combustion engine. Fuel cell powered vehicles break the distance/charging barriers that pure electric cars have to contend with. As far as range, Honda is getting in the mid 200s per fill up with a 5K psi tank, GM and Toyota appear to be using a 10K psi tank with similar range in their fuel cell powered vehicles

So far I have not yet seen a way to use this technology in an aircraft. The challenge is to figure out the way to power the GA fleet as environmental pressures eliminate lead from the fuel without breaking the bank of the average pilot.

Posted by: RAY DAMIJONAITIS | October 19, 2008 11:06 AM    Report this comment

Honda says that it is getting the same value on their H2 Clarity that equals 75 miles per gallon of gas. Granted, right now the range is 200 miles and it really needs to double that to 400. But the point is the technology is there, and if pushed hard enough we can get there, but we are going to need filling stations. Solve the oil problem for cars, and there is enough oil produced here ion the US to fuel airplanes for several hundred years. All without importing any oil. We need nukes for clean electric, H2 stations for clean cars and the impact of aircraft is minimal, unless of course Congress views all airplane owners as "rich" and makes us give them to the poor or to redistribute our wealth.

Posted by: RONALD MASON | October 19, 2008 11:36 AM    Report this comment

unless of course Congress views all airplane owners as "rich" and makes us give them to the poor or to redistribute our wealth.
Which congress may very well do.

Posted by: Steve Waechter | October 19, 2008 12:25 PM    Report this comment

>> Hydrogen is easily produced via electrolysis.

But at four times the energy consumption of making it from natural gas or crude oil. Does that explain why less than 1% of the hydrogen made in the US today, primarily for chemical or refining purposes, is made electrolytically? :-)

Posted by: Paul Millner | October 19, 2008 1:11 PM    Report this comment

Why would you want to turn natural gas into hydrogen to run a car? Compressed or liquid natural gas has been used for years to run cars and buses.

As for fuel cells, they have been the technology of the future for the last 100 years. As hard as they are trying, there have been no breakthroughs. Certainly, there have been some incremental improvements recently, but most of what is known about fuel cells was very well understood during the development of the moon missions. They are very expensive to produce and prone to catastrophic failure if overheated or contaminated.

We can only hope that some day, somebody will develop a membrane that will separate the hydrogen and oxygen from water using little or no energy, to be used in a $1000.00 disposable 50KW fuel cell. I’ll run down to the dealer on my hover board to get one!

Posted by: RICHARD JONES | October 19, 2008 11:56 PM    Report this comment

We can only hope that some day, somebody will develop a membrane that will separate the hydrogen and oxygen from water using little or no energy, to be used in a $1000.00 disposable 50KW fuel cell.
Now you're talking!
I've been envisioning that for years. We gotta get the hydrogen out of the water, that H2O is just too darned stable!

Posted by: Steve Waechter | October 20, 2008 12:19 AM    Report this comment

>> Why would you want to turn natural gas into hydrogen to run a car?

So that you can sequester the carbon. That's envisionable (and being done now) in industrial processes. It's cost prohibitive to try and capture it at the exhaust pipe of each vehicle.

Please note that I've simply answered your technical question... not espoused a world view.


Posted by: Paul Millner | October 25, 2008 10:42 PM    Report this comment

One reason that price comes down slowly is that high prices discourage consumption, and the high price fuel has to be consumed before it can be replaced with cheaper fuel. The glider club I belong to uses mogas, our current inventory cost us $4.30. But we have to use it up at the higher price before we can replace it at $2.50 or whatever the price will be at the time. And , of course, if everyone is waiting to fly when the price comes down, that can take a very long time, especially at this time of year when flying activity is low anyway due to weather in the Northern states.

Posted by: DAVID RAWSON | October 26, 2008 8:58 AM    Report this comment

The answer is best provided by the manager of the Charlotte-Monroe Executive Airport (EQY), John Brattain. I will quote from an email to me from him.
“The avgas price is set weekly. It is based on the last week’s average daily rack rate for premium auto gas plus $0.55. The price goes up and down with auto gas, but with a week’s delay....I agree that, based on crude oil prices, auto gas (therefore avgas) should be lower than it is today. Also, it doesn’t make sense that avgas prices are linked to auto gas prices. Avgas is produced in batches only a few times per year and transported by ship, barge, and rail. So the avgas on the market today has very little direct relation to the auto gas at the pump. It’s frustrating….”
- John Brattain, Manager, Charlotte-Monroe Executive Airport (EQY)

For the record, avgas moved up in near lockstep with the upward rise of crude oil until its peak of $147/barrel on 7/11/08. On that day, avgas peaked at EQY at $5.47/gallon.

posted by Todd Fuller
Charlotte-Douglas International Airport Advisory Committee Nominee

Posted by: Todd Fuller | November 3, 2008 11:04 PM    Report this comment

Avgas was for you $5.47 at its peak on July 11 2008, yet yesterday I just paid $5.35 per gallon at what is considered a "lower" price field here in Ohio. You have now clearly established what I have been saying in this blog, the FBO's are ripping us off! 100LL should be somewhere in the $3.00 a gallon range, not still staying at the highest prices of summer. The idea that this is "old" fuel goes out the window when the prices rise so fast but never seem to fall. The FBO's can't have it BOTH ways, they can't raise the price quick complaining about new price increases, then refuse to drop the price when the cost goes down. They are destroying the very market that feeds them.

Posted by: RONALD MASON | November 4, 2008 2:12 AM    Report this comment

Well, the price of Avgas is starting to come down. I filled the tanks over in Winchester, Indiana Saturday at ( I think) $3.94 a gallon. Under $4.00 anyway. I think as the FBO's refill their tanks we'll see the price come down. Even this guy said he was worried, if the price jumped back up significantly for the next load he might not have enough to pay for the load of gas at the higher price. This is a small rural airport, and a small FBO.still he's providing some competition on price so hopefully the cost of flying will be cheaper for a while. I have no doubt we'll be right back to recent prices again before long. Nothing has been done to change the long term situation.

Posted by: DAVID RAWSON | November 4, 2008 11:55 AM    Report this comment

$5.47 for avgas right now - Nov. 4th 2008 is plain and simple a ripoff... $3.94 is better but still at least a dollar too high.

Todd Fuller
Charlotte-Douglas International Airport Advisory Committee Nominee

Posted by: Todd Fuller | November 4, 2008 12:51 PM    Report this comment

Today, with oil now selling at $40 a barrel, we in Ohio still have most of the FBO's charging in the $5.00 a gallon range.

Whoever made the comment that the FBO's are pricing their fuel at the cost of purchase have not looked at the prices in OHIO!

I just paid in Florida $3.75 a gallon and there is no reason all the FBOs should not be in this range.

With the economy tanking, why are these FBOs still keeping the cost of fuel so high?

Posted by: RONALD MASON | December 6, 2008 6:32 PM    Report this comment

Ronald, funny you mentioned Ohio... I was just up there last week with my Cessna Skylane RG. My wife and I flew in to Akron-Fulton for a few days. I was not planning on buying fuel there, but belting a 20 knot headwind there, and then three days later, a 20-30 knot headwind home, I had no choice. AKR's best price was $4.75 a gallon, AFTER my Airnav.com Airboss fuel discount. In contrast, at my home field of EQY, avgas is $3.67 a gallon, and Lancaster, SC, not far away, is $3.50 a gallon.

I did notice that Athens, Ohio reported a very nice $3.70 a gallon last week, so I thought about stopping there, but time was shorter than expected for the return flight home.

Part of the high cost of fuel in Northeast Ohio is that few are flying there, and there is a lot of expensive fuel in the ground. At least that is the excuse for high fuel cost there. But, the runup in fuel was relatively brief and violent. Conversely, avgas is made only 3 or 4 times a year, and trucked or brought in by boat, but yet FBO's were jacking up the price within a few days or a week or two max, of the price of oil being raised, during the runup - but, on the flip side, are lowering their prices much more slowly than the rate oil is falling.

Todd Fuller
Airport Advisory Committee
Charlotte-Douglas International Airport

Posted by: Todd Fuller | December 6, 2008 7:06 PM    Report this comment

>> Whoever made the comment that the FBO's are pricing their fuel at the cost of purchase have not looked at the prices in OHIO!

How do you know that, Ron? Have you examined the inventory and purchase records for those Ohio FBO's? How do you expect them to replace the cost of inventory they bought at $4+/gallon when weekly volumes are tiny?


Posted by: Paul Millner | December 6, 2008 7:45 PM    Report this comment

The "excuse" that was used when the price of 100LL went up before the actual cost to the FBO was because they had to have enough money to replace the fuel they sold.

Now why does this argument not work in reverse?

They can drop their prices and have more than enough money to replace their inventory.

They can't have it BOTH ways, i.e., OK to raise the price BEFORE it costs them money, but they can now hold the price up till all the inventory they bouht is sold.

Posted by: RONALD MASON | December 6, 2008 8:17 PM    Report this comment

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