GMU Masters Project- Spring 2013
Systems Engineering and Operations Research Department
Course Professors: Dr. Andrew Loerch and Dr. Philip Barry
Project Sponsor: Dr. Lance Sherry
An Analysis of Alternative Jet Fuel Supply for Manassas Airport
Manassas Regional Airport is owned by the City of Manassas and located in Prince William County, approximately 30 miles southwest from Washington DC. In 2012, it was the fourth busiest airport by operations in the Commonwealth of Virginia, averaging 237 operations a day. However, those operations are a function of aviation fuel, which is powered by petroleum that is cheap enough for those operations to be affordable. If petroleum prices were to increase too much and jet fuel prices were to get too expensive, the cost of flying could become too prohibitive to the flying customer, which risks putting every Manassas Regional Airport stakeholder, including the airport itself, out of business. If an alternative to conventional jet fuel could be developed, then the risk of unmanageable petroleum prices facing the aviation industry would be mitigated.
The purpose of this project was to determine the best way to bring bio-based alternative jet fuel to Manassas Regional Airport. If alternative jet fuel could provide assurance that fuel prices won’t become too expensive or too volatile, than every fuel distribution stakeholder would have a financial interest in acquiring alternative jet fuel. Solving the problem requires an understanding of Manassas Regional Airport’s operations, fuel distribution system, the motivation of Manassas Regional Airport fuel distribution stakeholders, existing alternative jet fuel suppliers that could serve Manassas Regional Airport, and the availability of bio-based alternative jet fuel feedstock in the region.
In 2012, the Airport Cooperative Research Program (ACRP), a collaborative aviation research initiative focused on improving airport competitiveness with innovative solutions, published a report titled, ACRP 60: Guidelines for Integrating Alternative Jet Fuel into the Airport Setting. The report outlined a framework for evaluating the feasibility of introducing alternative jet fuels into an airport’s jet fuel supply chain. This report, which served as the primary influence in the development of this team’s approach to solving this problem, helped the team identify options to evaluate as well as the approach used to evaluate those options. The team identified three options for bringing bio-based alternative jet fuel to Manassas Regional Airport.
1. Drop-in Biofuel Delivery. This option simply involves purchasing bio-based alternative jet fuel from a biofuel supplier.
2. On-Site Blending of biofuel. This option involves purchasing both unblended biofuel and conventional jet fuel, and blending the two fuels at the airport. The blending is required in order for the fuel to satisfy chemical specifications of safe jet fuel.
3. On-Site Production of biofuel. This option involves constructing a biofuel production facility on airport property and producing alternative jet fuel at the airport.
The logistic feasibility of each option was determined by analyzing the how each option could be implemented. The financial viability of each option was evaluated by comparing each option’s cost over a 20 year period to the airport’s option of doing nothing, and continuing to use conventional jet fuel. Some of the costs associated with each option could be estimated and adjusted for expected inflation of the next 20 years, but some factors required the development of a sophisticated forecasting model to predict prices. Conventional jet fuel and soybean oil were the two components of the price of alternative jet fuel that required the sophisticated forecasts to estimate their price over a 20 year period. Using these forecasts as inputs, a comprehensive cost model was developed for evaluating each option.
While options 1 and 2 were deemed not logistically feasible in the near term, all three options are logistically feasible in the long term. However, all three options are too expensive. In fact, the break-even cost per gallon of jet fuel with any of the three options was estimated to be nearly twice that of conventional jet fuel. These results are summarized below.
Summary of the Analysis Results
There are, however, circumstances that could change that may lead to a situation where bio-based alternative jet fuel at Manassas Regional Airport becomes an economically viable reality. These specific circumstances are related to price divergence between biofuel feedstocks and jet fuel, regulatory incentives for biofuels, and technology improvements. These circumstances are studied in detail at the end of this report