Or maybe it'll be algae, essentially pond scum, fueling them. Or jatropha, a smelly and poisonous subtropical plant with nicknames such as "black vomit nut" or "bellyache bush." Or liquid fuel converted from coal or natural gas, using a technology pioneered by Adolph Hitler's Nazi war machine.

Airlines, airplane and engine makers, the fledgling synthetic and biofuels industry, the U.S. government, environmentalists and even the big oil companies are working together to develop alternative fuels from these and other sources. Their goal: to replace a significant portion of the 19 billion gallons of kerosene that U.S. carriers burn in their planes each year and to do it by the end of the next decade. If they succeed, airlines will reduce their carbon footprint — and save big money that could possibly help hold down fares.

The U.S. Air Force also is pushing development. By next year, it wants all of its planes certified to operate on a 50/50 mix of conventional jet fuel, known as Jet A, and alternative fuel. Air Force generals don't want their planes grounded by a geopolitical event that pushes oil prices through the stratosphere or stops the flow of foreign oil.

The alternative fuel industry only now is beginning to move beyond the research-and-development stage into commercialization. Yet, enough progress is being made that it's safe to say it won't be long before Air Force pilots and commercial travelers will be flying in planes powered, in part or entirely, by synthetic or biofuels.
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"We're looking at five-year time horizons, not 20-year time horizons," says Continental Airlines CEO Larry Kellner. "This isn't going to happen in 2010, but it needs to happen before 2020."

The International Air Transport Association, the trade group for airlines around the world, has a goal of replacing a quarter of airlines' oil-based fuel consumption with bio or synthetic alternatives by 2025 and a third of it by 2030.

Earlier this month, Continental took a Boeing 737 up for the USA's first test flight of a jet burning a mixture of conventional jet fuel and biofuels. The test featured a 50/50 mix of Jet A and a biofuel in one engine. It was the fourth such test in the world in the last 12 months. It was the first using a plane with just two engines, and the first in which the alternative fuel was partially derived from algae. On Jan. 30, Japan Airlines will send up a jet using fuel that includes camelina, a weed sometimes called "false flax."

In touting their test flights, Kellner and other airline executives emphasize they're doing their part to address climate change by reducing the carbon dioxide, nitrous oxide and particulates discharged from their jet engines.

Burning biofuel made from plants and even synthetic fuel made from liquefying coal and gas can cut a jet's carbon emissions. Although they emit carbon dioxide when burned, biofuels leave in the atmosphere only what the plants they're made from had absorbed. Synthetics also leave smaller carbon footprints than pure Jet A fuel. They also emit less nitrous oxide and particulate pollutants.

What the airlines don't talk much about is the big money they could save by turning to alternative fuel. Results of the Houston flight are still being evaluated. But Continental test pilot Richard Jankowski reported that during the 80-minute flight, the plane's right engine burned noticeably less fuel than the left, which ran on pure Jet A.

Burning less fuel translates into big dollar savings.

For example, in 2008 the big U.S. airlines burned about 19.6 billion gallons of jet fuel and paid an average price of $2.98 a gallon for it, according to estimates from the Air Transport Association, the trade group for U.S. carriers. That's nearly $58 billion spent on fuel. A 5% reduction in fuel burned at last year's prices translates into $2.9 billion in savings.

How big is that? U.S. airlines have reported net annual profits of $2.9 billion or more only six times in their history. Even at today's lower, and probably temporary, prices of about $1.51 a gallon, a 5% reduction in fuel consumption would generate about $1.5 billion in annual savings.

Biofuels offer other potential savings.

The European Union has pending legislation that would require airlines that fly there to pay through a pollution-allowances trading system if they emit too much greenhouse gas. Continental won't say how much it could save if burning alternative fuels can help it reduce its emissions and avoid paying European penalties. "We really haven't studied that yet," Kellner said before the test flight.

But Barry Cohen, who heads the National Algae Association, a new trade group promoting algae production, says it's plenty. "It's in the hundreds of millions of dollars a year, per carrier, potentially," he says. Such penalties, on top of high fuel prices, threaten airlines' financial survival, he says.

Closer to market

Some alternative jet fuels are closer to market than others. Synthetic fuel already is tested and available. It's been around since the 1930s, when the Nazis began converting coal into gasoline using a method invented by German scientists Franz Fischer and Hans Tropsch. Sasol, a South African company, began producing Fischer-Tropsch synfuels in the 1950s and beefed up production in the 1980s to help the nation cope with trade embargos for its former apartheid policy.

Syntroleum, a firm based in Tulsa, supplied the Air Force with 100,000 gallons of synthetic fuel for flight testing in 2006. Beginning in 2016, the service plans to buy 400 million gallons of it annually — enough to power a quarter of all its domestic U.S. flights in a year.

The biofuel closest to market is animal fat, including that from chickens.

Dynamic Fuels, a partnership between Syntroleum and meat-processing giant Tyson Foods of Arkansas, broke ground in October on a $138 million refining facility in Geismar, La. The plant will turn chicken fat, beef tallow, pork lard and grease into liquid fuel. It is expected to begin production in 2010 and turn out about 75 million gallons of fuel a year, says Ron Stinebaugh, Syntroleum's senior vice president of finance.

Animal fat isn't the best long-term solution for deriving fuel from a renewable resource, says Jennifer Holmgren, head of the Renewable Energy and Chemicals business at UOP. Now a division of Honeywell, UOP developed most of the chemical processes used in refining today's petroleum fuels. Holmgren's unit is charged with doing the same thing for alternative fuels.

"You aren't going to start raising animals for energy," Holmgren says.

Better options are non-food crops, such as jatropha, camelina and algae, she says. Fuel from jatropha and camelina will be on the market within three to five years, she says. Fuel from algae is eight to 10 years away because research on it began later.

There's not likely to be a single winner among the various alternative fuels that will be adopted for use by all the world's airlines, says Sebastien Remy, head of alternative fuel research for European airplane maker Airbus. "But there will be one specification for the quality of the fuels to come from these various alternative sources," he says. "The engines should not be able to tell the difference between conventional jet fuel and whatever alternative fuels airlines choose to use in the future."

Which fuel is best for an airline may depend on location, he says. In Asia, camelina is abundant. In Australia, Mexico and parts of South America, where conditions for growing jatropha are ideal, it likely will be the primary source of alternative fuels, Remy says. In North America, synthetic fuel may make more sense because coal and natural gas are abundant.

Longer term, algae may be what fuels the engines in U.S. airline jets. It can be produced in high volume, and the USA has plenty of space to grow it.

"Jatropha and other grains will be on the market sooner, but only in the tens or hundreds of millions of gallons," says UOP's Holmgren. "Algae will be produced in the billions of gallons a little bit further down the road."

Algae is among the fastest-growing organisms on Earth. It takes up little space relative to its production capacity. Some strains can go from incubator to harvest in 14 days. And it grows best in brackish water, either in ponds, in a high-tech greenhouse environment known as a bioreactor, or on "algae farms," where nutrient-filled water flows through miles of tubes winding around a few acres of land.

"You get an awful lot of productivity out of 1 acre of algae when compared with 1 acre of just about any other crop," says William Thurmond, a bio-energy researcher affiliated with the National Algae Association.

That kind of large-scale production is necessary to get the cost of algae fuel down enough to compete with conventional fuels. But it's doable, says Cohen of the National Algae Association.

Three years ago, a gallon of algae fuel cost about $300. Today, it's $10 to $20 a gallon. Cohen says the cost of producing unrefined algae crude could be less than $1 a gallon in a few years as technical problems are solved and as production is ramped up to industrial levels. But that will require significant investment.

Cohen, citing government estimates, says about $66 billion will be needed to meet demand by 2025. However, he says, that's far less than the $1 trillion invested in U.S. oil production, refining and distribution infrastructure.

Tim Zenk, vice president at Sapphire Energy, the San Diego start-up that produced the algae fuel used in the Continental flight, says his company's investors are motivated in part by environmental concerns.

But that's not the only reason. Investors led by Microsoft co-founder Bill Gates' Cascade Investments and by the Rockefeller Foundation's venture-capital arm funded Sapphire to the tune of $100 million because they also think algae production will be a great investment.

"We think we'll get 3,000 gallons (of biocrude) a year per acre," Zenk says. "You're going to see very large scales of production."