First Word: January 2010

In covering the ever-evolving avgas replacement story, I talk to a lot of people and receive e-mail from hundreds more. Owners and operators are starting to pay attention to this story and thats a good thing because at some point, they are going to have to decide what they want.

Ive noticed a not-so-subtle undercurrent from owners of low-compression airplanes who are alarmed at the idea that there will be only one replacement fuel: an expensive, 100-octane equivalent that theyll be forced to buy for lack of choice. In this issue, were dealing with one potential second choice, mogas. Although some owners are using it with good results, making it a realistic choice for airports will be a hard, uphill fight. The largest barrier is that finding premium mogas without ethanol-E0-is difficult and getting more so.

Ethanol mandates mean that blenders are looking for every drop of gasoline as a home for the rising tide of ethanol and the tiny E0 niche market is the last target of opportunity. In 2011 or certainly by 2012, the industry will hit the “blend wall,” the point at which there isnt enough gasoline to absorb all of the ethanol being distilled. The EPA has already approved E15 as a response and ethanol critics say when this hits the streets, the howl from vehicle owners will be clearly heard in Washington. E15 reduces mileage and some cars just wont run on it. Its affinity for water could make for nightmares if the fuel is stored more than a month or two, which it frequently is for many users.

Our survey this month revealed that some aircraft owners are using E10, something thats not recommended and which isnt a long-term solution. So what is? In this country, theres hard resistance to a dual-fuel system that might consist of 94UL, for example, and an unleaded equivalent of 100LL. Refiners are blunt about this. They dont want to make two fuels and FBOs dont want to invest in tankage that would essentially split sales that are already declining. You cant blame them for not accepting the argument that they should spend $50,000 on tanks as a public service, then make the money on hangar fees and $100 breakfasts. That works for some airports-minimally-but its a loser for many others.

Yet in western Europe, this model is working. In Sweden, for instance, many smaller airports have tankage for 91/96 (essentially 94UL) and 100LL. How do they make it work? For one thing, the ratio of high-octane engine to low-octane engines is different. In the U.S., the high-octane users burn 70 percent of the avgas consumed. In Europe, its closer to 50/50 and is trending toward the lower octane. The price Delta between the two fuels is only about a dime in favor of 91/96, so that gives you a reasonable price signal on what 94UL might cost in the U.S. if it ever comes to market. (Actual costs, sans taxes, is $5.14 for 100LL and $5.04 for 91/96. With taxes, the costs are north of $9 per gallon.)

But the real driver is that in Europe, the fuel suppliers typically install and own the tanks, not the airport. Furthermore, at many airports, the operator pays for the fuel only as its used. At a U.S. airport, when a 7000-gallon tanker shows up, the airport has to cut a $25,000 check. FBOs told me that if someone wanted to build the tankage, they would be receptive to a two-fuel approach. Thats about as close to a no-brainer as youre going to get.

I see an opportunity in this for someone who wants to try marketing a second fuel vertically in the U.S. It could be done regionally as a test case, either with mogas or maybe even with 94UL as a test market. And maybe were wrong to assume every airport will have two fuels. Maybe some will have only low-octane, some high octane, to suit their local market.

I dont know if the idea has legs or not. But to break us loose from the box were in, the entire avgas replacement problem could stand some out-of-the-box thinking and thus far, Im not seeing much of that.­-Paul Bertorelli