Southwest Airlines agrees to purchase three million gallons per year of renewable jet fuel sourced from forest residues
Tue 30 Sept 2014 – Southwest Airlines has entered into an agreement with Colorado-based Red Rock Biofuels (RRB) to purchase around three million gallons per year of renewable jet biofuel that will be blended and used at the low-cost carrier’s San Francisco Bay Area operations. First deliveries are due to start in 2016 and RRB says it will be able to provide its product at cost parity with conventional jet fuel. RRB has just secured a $70 million federal grant to help fund the building of a $200 million refinery in Oregon that will produce jet fuel, diesel and naphtha from forestry residues sourced from timber operations. Around 140,000 dry tons of woody biomass feedstock will be converted into at least 12 million gallons annually of the three products. Another recipient of a $70 million federal grant is Fulcrum BioEnergy, which recently signed a jet biofuel agreement with Cathay Pacific Airways (see story).
Southwest Airlines, which is a long-time member of the Commercial Aviation Alternative Fuels Initiative (CAAFI), is the largest domestic carrier in the United States and the first low-cost to commit to purchasing alternative jet fuels. The Dallas-based airline said the RRB venture was the first feasible opportunity it had found to meet its financial and sustainability objectives.
“Our commitment to sustainability and efficient operations led us on a search for a viable biofuel that uses a sustainable feedstock with a high rate of success,” said Bill Tiffany, Vice President of Supply Chain at Southwest Airlines. “RRB’s technology, economics and approved use made entering into an agreement for purchase a win-win situation.”
RRB was founded in September 2011 by energy consulting firm IR1 Group and has just 10 employees. RRB’s technology process begins with the gasification of woody biomass to produce synthesis gas that is then cleaned before Fischer-Tropsch conversion into liquid hydrocarbons and subsequent refining into jet, diesel and naphtha fuels. Such jet biofuels have already been ASTM approved for commercial airline use in 50/50 blends with conventional jet kerosene. RRB says its technology platform combines a small economic footprint with a flexible feedstock design.
In July 2013, RRB selected Fischer-Tropsch technology provider Velocys (formerly Oxford Catalysts) for the design and possible construction of the Biomass-to-Liquids (BTL) plant in Lakeview, Oregon. Also last year, RRD received a further $4.1 million grant from the US Department of Defense to help fund detailed engineering and design for the planned facility.
“From the outset, we have sought to build the best possible team of project partners,” said RRB CEO Terry Kulesa. “A conversation we started with Southwest on the premise of providing renewable jet fuel at cost parity with conventional jet fuel has evolved into a great partnership.”
The $70 million grants to Red Rock and Fulcrum were awarded under phase 2 of the Defense Production Act Title III Advanced Drop-in Biofuel Production Project following a 2011 Presidential directive that aims to boost and diversify the domestic fuel supply base, strengthen national energy and environmental security, and expand the operational capability of the US military (see story). The awards to three projects, totalling $210 million, are jointly made by the Departments of Navy, Energy and Agriculture.
The projects – the third grant went to Emerald Biofuels – are expected to produce more than 100 million gallons of military grade fuel beginning in 2016 and 2017 at a price competitive with petroleum.