Early January is a time to review what transpired in the past year and make plans for the coming one. Fuel being consistently named by aircraft owners as their number one concern, it’s appropriate to review trends in recent years and make some predictions for 2013. The U.S. Energy Information Administration provides a wealth of statistics on all sources of energy, including the fuels we use. For instance:
- Since 2009, avgas consumption increased somewhat to 681.2 thousands of gallons per day at the end of 2011. Whether this increase will continue, or we are seeing a return to the long-term decline of around 3% annually, is impossible to say at this time.
- By comparison, Jet-A consumption has dropped since 2009, having reached 53,459 thousands of gallons per day at the end of 2011. Note, though, that avgas consumption is only about 1.3% of Jet-A consumption, which includes all of GA and the airlines (it is not clear whether these numbers includes military aircraft, however).
- By contrast, the total consumption of gasoline was 354,952 thousands of gallons per day at the end of 2011. Jet-A is 15% of this figure, and avgas only 0.19% compared to gasoline, a miniscule amount and the reason that avgas is often called a “boutique fuel.”
- Premium gasoline, the best source of mogas, accounted for 31,846 thousands of gallons per day at the end of 2011, about 9% of total gasoline sold. While a small portion of overall gasoline sales, this is still a figure 47 times greater than for avgas at the same time period.
While no statistics are yet available for total sales of these fuels in 2012, by switching the “View History” to “Monthly” for each of these charts, it appears that little changed between the end of 2011 and 2012. Numerous recent articles forecasting 2013 GA aircraft sales for 2013 paint anything but a rosy picture for the coming year. We’ll likely being doing well if we simply hold our own in the coming months, given widespread uncertainty over the U.S. and foreign economies, employment, regulatory and tax reform, etc.
The outlook for the oil & gas (O&G) industry is one of the few areas that provides some encouragement that aviation fuels could drop in price. According to this recent article from the O&G industry publication RigZone, Canada is already seeing a rapid drop in the sales price of its crude oil, bad news for the oil industry but great news for consumers. As reported in this blog a few weeks ago, the U.S. is already a net exporter of refined gasoline and we’re predicted to be the world’s largest producer of crude oil by 2020, due in part to the amazing technology of hydraulic fracturing and directional drilling.
For users of mogas, this is good news, since a large portion of the refined products from crude oil goes to fueling highway vehicles. Jet-A is also relatively easy for refiners to produce, and in large demand, so we should expect to see downward pressure on its price, too.
Avgas, being a boutique fuel that requires a lead additive (TEL) with all the costs and regulatory issues this brings, is another story. With the last major overseas users of leaded fuels for highway vehicles switching to unleaded gasoline in 2013, demand for TEL will be limited to avgas users, which are primarily found in North America and Europe. This map from the EPA shows where leaded fuel was still in use in February 2009.
The first $50 question remains: How long will the last producer of TEL, England’s Innospec, remain in a dwindling business? This statement from the company’s website shows that the company is planning for this now: “… as a responsible organization, we recognize the importance to the environment of reducing lead in automotive fuel so we are supporting the global phase-out program for TEL in two important ways. Firstly, we recognize that the economies of some countries continue to depend on this product. They do not have cars with catalytic converters capable of running on unleaded fuel, so TEL remains by far the most cost-effective octane enhancer available. With our extensive market knowledge, built up over many years, we are in a great position to help these countries make the transition to unleaded fuel smoothly. We will ensure the continuity of tetra ethyl lead (TEL) supply during their phase-out period and provide comprehensive advice and guidance on how best to manage the changeover.”
The second $50 question pertains to the availability of mogas at airports and ethanol-free, aviation-grade mogas at gas stations for those who self-fuel. As this blog has frequently reported, while still small, the number of airports offering mogas continues to rise, as can be seen in the table at the bottom of this list of airports with mogas, and shown on this map, both from GAfuels blogger Dean Billing. (Note here the recent addition of E95, Benson Municipal Airport in southern Arizona, the first airport in the state to offer mogas in recent years.)
According to Dean, one of the nation’s foremost authorities on avgas and ethanol policies, we can expect the following in 2013:
- 1 in 4 chance that Innospec will stop making TEL, but there will be up to a two-year supply salted away in their tanks or in our tank farms.
- 1 in 10 chance that our refiners stop making 100LL because their accountants make the case it isn’t worth it.
- 1 in 3 chance 100LL will go over $10 a gallon. This is actually the one we should be betting on.
- The hard one is when we hit the ethanol blending wall, because as I found out this year when we should have hit it there is the 20% RIN carry-forward loophole, so we are about 15-18% below it. On top of that, the EPA hasn’t published the quotas for 2013. They are required to do that in November of each year, but I can find no record of it and without that you can’t tell where we are. We should be through the blending wall now into no man’s land. If, as I believe, demand is continuing to fall for auto gasoline across the U.S., then the blending wall is going to come this year.
Add to this the sudden departure of EPA Administrator Lisa Jackson in late 2012, and all bets are off on what, if anything, will be done about the unattainable RFS2 ethanol production mandates in 2013.
In summary, the outlook for lower prices for Jet-A and Mogas in 2013 is positive, while the future of avgas remains uncertain. Very little new news has been seen on the unleaded 100 octane development effort, and we do not expect anything significant in 2013. Unless something is done about the RFS2 ethanol mandates, it will become more difficult to find aviation-grade mogas at gas stations, although recent trends in the listings at Pure-Gas.org appear to indicate that retailers see a growing market for an ethanol-free option, despite the mandates.
Encouragingly, an increasing number of airports are making the extra effort to add mogas to their fuel options. We are also aware of one major unbranded avgas supplier that is planning to start offering mogas in 2013, which would be a first. This should send a clear message to General Aviation that mogas is a serious future aviation fuel, already the case outside North America and, as your blogger reported in the spring of 2012, the primary targeted fuel for virtually all new piston aircraft engines.
The GAfuels Blog is written by two private pilots concerned about the future availability of fuels for piston-engine aircraft: Dean Billing, Sisters, Ore., a pilot, homebuilder and expert on autogas and ethanol, and Kent Misegades, Cary, N.C., an aerospace engineer, aviation sales rep for U-Fuel, and president of EAA1114.