The use of algae oil as fuel is not just hype. It has been proven that it can be done, and according to Riggs, it has a “fairly compact footprint.” Part of the issue until now has been figuring out the best way to extract the oil.

In Riggs’ words, in the current process, “they literally cook the water out. It takes a huge amount of energy to do that. Eventually it turns into a 10% water content which is an extremely dry meal. Then they combine it with hexane to extract the oil.”

So it takes a lot of energy and the use of chemicals to get anything done, and that’s not exactly a sustainable process. OriginOil’s process is different in that it separates the lipids from the biomass and then the algae sinks to the bottom while the oil sits on top of the water. You can see a time-lapsed video of this happening on their website.

They don’t need any chemicals or energy to do this. All they need is a ton of water, which presents problems of its own. At least the water can be reused. After the process is complete, the water simply has to be refiltered and it can be used again and again with limited loss in the process. They’ve also found that you can harvest a certain amount out of a batch every day and it grows back by the next day. Right now, they can pull out about 12.5% per day.

So, now that the processes are improving, can we use this on airplanes? I doubt it. Riggs gave me some numbers to put things in perspective. Let’s say you have 1 acre. On that acre, you probably will have about 40% of it as actual tank capacity for growing. In that environment, you will turn out about 63,000 gallons per year for that acre. How many airplanes can that power?

It’ll keep a 747 in the air for about 18 hours. That’s it.

So at this point, you need a LOT of land to power a fleet of aircraft. It’s just not feasible right now. But there are plenty of other uses that are good for algae and that can help take some demand out for petroleum. Things like specialty chemicals and health foods can work very well.

Riggs was certainly up front about this. “It’s not a very pretty picture. The best the industry has reported, and some are skeptical, is $8 per gallon of oil and some people think it’s more like $12 or $14. It’s still very, very high.”

There is some good news, however. Costs can come down significantly in environments where the right conditions already exist: wastewater treatment plants. Think about it – a ton of water flows through wastewater plants every day, and they can grow algae while that’s going on. Then the cost is very low for production, but again, the quantities won’t power the airline industry.

In Riggs’ mind, we’re probably about 5 years out from having a sustainable algae oil industry, but he’s confident we’ll get there. In order to get algae to power airplanes on a large scale, there’s a lot left to do.

Alaska Fills the Void in the Austin to San Jose Market
American pulls out and a couple days later, Alaska moves in. This might be smart.

Continental’s Biofuel Test Results are Good
Continental’s biofuel test results mirror those of Air New Zealand. They’re good.

Frontier to Become Subsidiary of Republic
Frontier announced yesterday that it plans to come out of bankruptcy as a full subsidiary of Republic.

What is Republic’s Strategy?
Now that Republic has stepped out in a big way with its Frontier purchase, what exactly is its strategy?

787 First Flight Delayed . . . Again
Did you hear that scream from airline exec offices around the world? The 787 is delayed once again.

United Pilots Prepare for Scope Battle
Pilot negotiations at United are heating up and Scope is about to take center stage.

Malev Orders Sukhoi Superjets
The Superjet got a big order, but is this the start of something big?

Continental’s May Numbers Prove April’s Improvement Wasn’t a Trend
May numbers are out for Continental and they don’t look so hot. No surprise, of course, but still not fun to watch.

Just How Well Did Biofuels Perform in the Air?
Air New Zealand released results of its biofuel test in January, and the results are incredibly impressive.

Online Travel Agents Permanently Drop Booking Fees
Those temporary online travel agent booking fees have been made permanent.

US Airways May Revenue Looks a Lot Like Continental’s
US Airways released its May unit revenue numbers and the results aren’t pretty. No surprises, just not pretty.

Indianapolis Airport Facing Revenue Shortfall
Indianapolis built a new terminal last year, and now with traffic falling, the airport is facing a budget crunch.

Change Happens Slowly at American, Other Large Organizations
Here’s a fun example using American’s website design showing how hard it can be to effect change at a big company.

JetBlue Challenges Southwest at BWI
The focus is on Boston and Southwest and JetBlue start throwing down with new flights to new destinations.

Swine Flu May Present Third Major Hurdle for Airlines
If it’s not fuel or a poor economy, it’s something else. This time it’s swine flu, and though we don’t know the impact yet, it’s already being felt around the airline industry.

News from the Aviation & Environment Summit 2009
A month ago, the Aviation & Environment Summit was held in Geneva. See a recap here.

Why Would Delta Reintroduce Its Online Booking Bonus?
Delta has brought back the online booking bonus for a limited time. Now the question is . . . why?

United Enters Pittsburgh – West Coast Markets
United announced this week was starting long haul from Pittsburgh to the West Coast. This is an odd move that I’ve yet to figure out.

The tax ranged from 11 euros to 45 euros depending upon the length of your flight. It was supposed to raise about 300 million euros a year, but an official report says it will end up costing the economy more than 1.3 billion euros. At a time when economies around the world are scrambling to find revenues, ditching the tax was a pretty obvious result.

So did people really just stop traveling over a few euros? Nah. I’m sure there was some of that, but the problem was that people could easily hop a border into Belgium or Germany where there was no tax. In an area where distances are short, trains are fast, and there are no controlled border crossings, this tax is just a really dumb idea. Instead of saving the environment, the Dutch hurt their own economy and shifted traffic elsewhere. Brilliant.

So is this the end of the eco tax? I doubt it. My guess is that in the short haul, while the world is trying to claw out of a recession, there won’t be a ton of interest in increasing taxes that will end up hurting the economy, but that’s a short term issue. In the long run, all this does is make it clear that at least an EU-wide solution and potentially a global one is necessary instead of an individual country-sponsored one.

There are still taxes in the UK and Ireland, but those may survive since it’s a lot harder to cross a border to avoid flying from there. Italy has one too, but well, that’s Italy. I can never figure out what they’re going to do over there, and it’s usually the opposite of what I would do.

You should probably consider this a temporary reprieve. One of these days, we’ll see an EU-wide or global scheme to try to address this issue (beyond the EU ETS proposal scheduled for 2012), but that will be at least a couple years away.

Jonathon: We’ve had an ongoing debate with major fuel companies, so pretty much all the majors are interested. Three or four additional companies have approached us as well. We’re drawing up a short list of up to about a dozen companies.

Cranky: Other airlines, notably Virgin Atlantic and Air New Zealand, have run tests of biofuels recently. Would either of those fuels be eligible for testing in this program or do they not meet the criteria that you have set forth?

Jonathon: We’re not being overly prescriptive in terms of a particular fuel. It has to be what we call a drop-in fuel, meaning it has to work with existing technology. It has to be able to power the engines without modifying them, and it must work with existing supply technology. Also, it can’t compete with food, land or water supplies. I believe the Virgin fuel may not qualify because it competed for food crops. Apart from that, we’re not going to overspecify. We’ve intentionally called it alternative fuel instead of biofuel because it will be difficult for biofuel to meet those conditions because of the conflict with food or rainforest devastation. That being said, we’re not ruling out biofuel.

Cranky: Are there any incentives being offered to encourage fuel suppliers to participate? Is there a prize of some sort?

Jonathon:The big incentive is that any company that can supply fuel meeting the criteria will have a massive prize. Every airline around the world will want to buy it.

Cranky: What will you consider to be a successful test? Are there specific levels of fuel economy and emissions that must be reached for you to deem this a success?

Jonathon:We will lay out broad performance criteria. It needs to be commercially viable but we haven’t specified what that means yet.

Cranky: Are there any partners in this study beyond you and Rolls Royce? Have you involved any third party scientific organizations to oversee the data collection and interpretation?

Jonathon: No. Currently it’s just Rolls-Royce and ourselves. There will be a joint assessment between us. We’ll look at whether we need external experts on this or not. Rolls works with a number of universities, and so do we, and we’ll be looking at a number of contacts in the scientific field.

Cranky: You say testing will be complete by March 2009, but how long do you expect it to take before the results are finalized?

Jonathon:Quite shortly afterwards. Testing will start in January and it will take 4 to 6 weeks. Published results will be available shortly after the end of March.

Cranky: Will you be sharing the results of your study publicly?

Jonathon: Yes, we will be making the results public.

Cranky: What sort of response have you had from the community so far?

Jonathon: It’s been a very positive response from the community. We deliberately launched this prior to Farnborough and it’s certainly been a big topic of discussion.

Cranky: Have you spoken to any of your other partners about participating, like American Airlines?

Jonathon: Yes, we’ve had a couple of early conversations with American Airlines and certainly we’ll pick up on those.

So there you have it. It’s an interesting way to put this together. The idea is basically to say, “Hey, you got some good fuel? Come talk to us and we’ll let you test it on one of our engines for free.” I’ll be looking forward to seeing the results.