The Jet-A Concern: Infrastructure

ORLANDO -- As airports across the U.S. push to expand air service to their communities, they may be looking past a problem that could end any new service before it's started: getting enough jet-A to the airport for the carriers. That's the top concern expressed here by industry officials meeting at the 7th Annual Jet Fuel Conference & Exhibition.

Comments Robert Sturtz, director of petroleum and purchasing for United Airlines and a featured moderator at the event, "Airport authorities have little or no idea how the fuel actually gets to the airport. When they see the problem, it is already too late."

Sturtz says that throughout the history of aviation airports have taken for granted that fuel supply would be there when needed. "I've seen airports that have major expansion plans but have given little or no thought to the fuel infrastructure."

He and other fuel and airline industry veterans are cautioning that there is a pending crisis regarding jet-A supply. The reasons are varied, they say.

Refineries, Pipelines
A primary cause of the pending crisis is that there has not been a major refinery built in the United States for decades, and no one foresees any being built in the near future. Environmental liability is the main reason, they say. In addition, the increased refining capacity that has been added globally has occurred in Southeast Asia. However, while it was projected that those facilities would in time pick up any shortfall in the U.S. market, that has not occurred because of the tremendous growth in the Chinese market.

Similarly, major new pipelines are not being built, and some pipeline companies are beginning to rethink whether or not they want to continue to ship jet-A through their systems, due to the high sulfur content of the fuel. "The difficulty with handling jet fuel could lead some pipeline companies to stop handling it," says Sturtz.

At the same time, the traditional sources of funding such infrastructure, including airline fuel farms, is disappearing, say industry veterans. Airlines are less willing to form consortiums to build farms, and oil and pipeline companies are much less inclined to do so than in the past.

Compounding the problem, say officials, is the simple fact of attrition: veterans in both the airline and oil industries who are the most knowledgeable about the production, storage, and delivery of jet fuel are retiring and are not being replaced. Sturtz and others say the time is now for airports and the industry to recognize the challenge and begin to study ways to address it.

An Airport Problem
In the final analysis, say Sturtz and others, it is becoming more and more an airport problem, from ensuring there is product to serve the air carriers to making sure the necessary infrastructure is in place to handle and store the fuel. That, they say, may also mean financing the infrastructure.

Sturtz cautions airports that any significant construction of new jet fuel infrastructure is at least a three-year process. He and others say the issue of reaching infrastructure capacity is already occurring at some major airports, and that most major U.S. facilities could face a crisis within the next ten years. In fact, he says, in 2004 O'Hare, Dulles, Tampa, Orlando, Palm Beach, San Jose, BWI, Reagan National, and others all experienced some disruption or shortage of supply due to infrastructure-related problems. Specifically, Sturtz says, Washington Dulles is already exceeding its pipeline capacity because of increased consumption (read: airline growth).

Comments Dick DeiTos, executive director of the Metropolitan Washington Airlines Committee, which represents the interests of the carriers before the airport authority, "The current infrastructure does not support growth for IAD." Meanwhile, he points out, Dulles continues with a growth plan that includes construction of two additional runways.

Justin Walker, aviation manager for AirBP, echoes the warnings of Sturtz and others. "It's not just a matter of saying we have to spend more money," he explains. "It's a matter of serious analysis of the supply chain.

"There's less product in the system, serving an increasing demand. There is a need to upgrade the airport infrastructure."

Many pipeline and tank farm facilities, he points out, were constructed in the 1930s to 1950s timeframe. "It's easier to condemn some of these facilities than it is to rebuild them," says Walker.

Adds Sturtz, "Too many of us are looking at things as they are, not how they will be."