Biofuel in the Skies: Airlines Go Green

Jan. 15, 2008 — -- Do your eyes glaze over when you hear lectures by celebrities about buying carbon offsets – then watch as they hop on their private jets with a clear conscience? Yes, it's nice to be rich – and have someone else do the dirty work for you.

But hang on a sec. Some of the airlines – the travel option of commoners like you and me – are getting their hands dirty. More and more of them are working to lower their collective carbon footprints – because it's good for them, good for the planet, and ultimately, may be good for passengers' wallets.

Specifically, airlines and others are working to change the face of fuel: less petroleum, more pond scum – literally, in the form of algae – to create biofuels. It's a modern-day saga with good old-fashioned overtones: Man is remaking his world, partly because he wants to, and partly because he has to.

It's not going to happen tomorrow – but chances are, you will see big changes on the fuel front in your lifetime.

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Man has been harnessing oil since early Biblical times, but the modern petroleum era in the United States probably began in 1859 when the first oil well was drilled in Pennsylvania – then everything took off with the advent of the automobile.

Millions of cars later, we are dependent, mostly, on others for oil – oil that won't last forever (indeed, some have predicted U.S. oil could be used up in a matter of decades).

But above the din of quantity questions came the "quality" questions -- questions about burning oil and how it creates carbon dioxide emissions that can cripple the planet. Obviously, this is a huge concern in the United States, the world's biggest oil consumer. Seventy percent of our oil consumption goes for transportation, and not just cars -- in 2007 alone, U.S. airlines used 19.6 billion gallons of jet fuel (approximately 465 million barrels).

Meanwhile, amidst all the concern over emissions, it seemed that almost overnight, individuals and businesses were tagged with a scarlet letter called, the "carbon footprint." But the airlines have been working on this.

Actually, some airline people have been involved in biofuels since the 1970s, but now there's a real urgency and for the airlines, that urgency is obvious: lowering its collective carbon footprint is self-preservation. After all, the industry has just come off an insane cycle in which oil prices zoomed to unheard of heights, then just as quickly dropped to near 21st century lows – all in a single year. And most airlines, with the exception of Southwest (and its hedges), got stuck with huge bills at the height of the crisis.

Later, when other airlines joined in the hedging, prices took a dive well below the hedges. That's no way for any company to manage one of its biggest overhead items, but the airlines didn't have much choice.

The good news is, in a few months those hedges will begin to expire, and, because oil prices are still quite low, the airlines will be looking good again (for the moment, anyway). What's new is the carriers appear to be vowing never to get caught up in such a mess ever again – so they are not idle. Biofuel testing is stepping up.

Biofuels? Most are a blend of jet fuel (we still need some petroleum) and the oils from crops such as switch grass, jatropha plants, and the current darling, algae – which reproduces quickly. No cracks about algae, please – Bill Gates, for one, has invested in it. And, algae and other biofuels -- compared to petroleum-based fuels -- can reportedly reduce emissions by as much as 70 percent to 100 percent.

Virgin Atlantic was first up for testing, then Air New Zealand, and now Continental has successfully tested a biofuel. Next up, Japan Airlines. The biofuels vary: Continental tested a mixture of algae and jatropha plants, while Virgin Atlantic used a mixture of oil from coconut and palm trees.

Whatever is ultimately deemed "best" won't be cheap initially – not with all the start-up costs -- a single production facility, for example, has an estimated price tag of between $120 million and $180 million.

Still, looking at those figures – it occurs to me that that's a drop in the bucket compared to the $700 billion bailout passed this fall. And then there's our incoming president's commitment to "green jobs" and industries – and biofuels. That is no guarantee of anything concrete in the short term, but at least we can expect an atmosphere where ideas and actions will flourish.

Still, is our nation up to the challenge of changing over to something that, to some, still seems (and sounds) so outlandish? Biofuels – it's like a whole new world and not everyone seems to want to be part of it.

On the other hand – where there's a will …

Let me use the highly imperfect example of TV. I'm talking about the switch-over from analog to digital TV programming this year. Yes, there have been some bumps along the way, but no panic, and – thanks to help from the government, the change will be made. OK, I said it was an imperfect example – but change can happen.

So I believe the switch to biofuels will occur – eventually – because it has to. Face it – do we want to be dependent on others forever?

And the rewards to passengers will be obvious: No wild oil price swings means more uniform ticket prices – without the nasty surprise of a fuel surcharge. And, once all the expensive infrastructure is in place, we may well see cheaper prices at the pump, whether a car is pulled up beside it or a Boeing 777.

So next time you see Mary Movie-Star boarding her sleek new 15-seater while touting carbon offsets – remember, your "company plane" (just insert the name of an airline here) is working on its own solution to oil emissions … and I propose we cheer them on from the sidelines.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Rick Seaney is one of the country's leading experts on airfare, giving interviews and analysis to news organizations, including ABC News, The New York Times, The Wall Street Journal, Reuters, The Associated Press and Bloomberg. His Web site FareCompare.com offers consumers free, new-generation software, combined with expert insider tips to find the best airline ticket deal.