Air Force goes supersonic on synthetic fuel.
An Air Force B-1 bomber filled with a 50-50 synthetic blend jet fuel flew past Mach 1 today. The synthetic fuel is carbon based, and is derived through a process that takes coal (or natural gas or biomass) and converts it into liquid hydrocarbons (i.e., fuel). This synthetic fuel is then mixed with 50% jet fuel in order to reach the optimal blend. The Air Force intends to certify all of its aircraft on this blend by 2011 and to use it in 100% of its flights by 2016.
While it is nice to see a branch of the government leading the way on alternative fuel use, as the technology currently exists, synthetic fuel production actually emits more greenhouse gasses than traditional petroleum. The impetus for the Air Force’s policy is twofold: economics and energy independence. The Defense Department, which accounts for 90% of all fuel use by the federal government, spends billions of dollars each year on petroleum. Additionally, unlike oil, there are plentiful sources of coal, natural gas and biomass, in the United States, thereby making the military less dependent on the global oil supply.
A 747 flying on coconut oil?
We had a post recently about whether Virgin Atlantic’s green programs were a true attempt at improving the environment or if they were mere greenwashing. While we didn’t have a strong opinion, we tended to feel that they were probably a mixture of both.
Therefore, we were interested to come across this article describing how Virgin Atlantic recently had a test flight of a 747 from London to Amsterdam, where the plane carried 5% biofuel derived from coconuts. Given the publicity and grandiose nature of this test flight, and the fact that biofuels may cause more environmental damage than the fossil fuels they replace, we question whether the intention here is merely positive marketing, instead of substantive change?
Nonetheless, as our readers have probably noticed, we are hesitant to throw out the “greenwashing” accusation too quickly. No one knows for sure what the best solution will be, and little has been done in the past, so even getting corporations just talking about going green has some value. Of course, policies that materially improve the environment should be the real goal. (Which probably does not include a 747 flying with 5% coconut fuel.)
ECO:nomics conference participants debate “peak oil” theory.
On the final day of the Wall St. Journal’s ECO:nomics conference in Santa Barbara, one of the programs featured a debate between two experts over the claim that peak oil extraction has been reached. (Wikipedia defines “peak oil theory” as: the point in time when the maximum rate of global petroleum production is reached, after which the rate of production enters its terminal decline. If global consumption is not mitigated before the peak, an energy crisis may develop because the availability of conventional oil will drop and prices will rise, perhaps dramatically.)
While we have no clue whether we’ve reached “peak oil” production, or not, the fear of inevitably declining oil supplies should continue to create a huge incentive towards alternative fuel development. Once entrepreneurs and businesses realize that demand for oil is forever going to exceed available supply, this will provide investors and developers of alternative fuel supplies protection from being undercut by lower oil prices. (Since demand for oil will forever outpace supply.)
Without having any expertise regarding the nature of global oil supply and demand, it is our personal hunch that much of the reason for high oil prices right now is related to the fact that two oligopolies control much of the global supply: OPEC and big multinational oil companies. It is a fact that OPEC intentionally limits its oil production in order to artificially maintain a higher price for its product. Whether big oil companies collude, is less clear. However, explicit collusion may not even be necessary given the enormous role each individual company has in providing global oil supplies. They could probably affect global prices through discrete decisions to limit production independently. Like we said, it is our hunch that the consolidated nature of this industry plays a role in current price levels. If that continues to be the case, it may be irrelevant if we’ve reached peak oil, since maximum output won’t be reached anyway. Regardless, high oil prices should continue to provide a positive incentive for entrepreneurs and innovators to come up with alternative solutions.
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Private Leaders
