The petroleum refining process starts by boiling and pumping the hot solution into a distillation column. The solution has differing temperature ranges at each height. Off the top, (the coolest part), they pull the Liquefied Petroleum (LP) and butane. Below that is gasoline, also called straight run. However, at this point, the octane is usually too low, but through catalytic reforming or alkylation processes, the octane is boosted.
The next range of products from the column are called middle distillates – the Jet A and diesel products.
Lower still – the hotter and heavier fluid is used for fuel oil. Even the dregs of the column are used to make asphalt or coke.
JET A – A Relatively Simple Process!
Jet fuel is simply streamed off the column, and its sulfur content is lowered. That’s it. It is now ready to be shipped.
100 LL – The Problem with Lead
To make 100LL, the refinery takes the alkylate and re-distills it. Then, it’s pumped into a separate tank where they add 2.0 grams of lead to each gallon of fuel. The lead and the equipment needed for the injection is very costly. There is only one plant in the world now producing Tetraethyl lead (TEL), so there is no price competition. Another problem is the health hazards associated with pure TEL, which must be handled in dedicated systems.
The 100LL batch is tested and if the octane does not meet the 100/130 levels, they add an expensive component called Toluene concentrate to increase the octane. Once the batch meets all of the requirements, it’s ready to ship.
Liability costs are factored into every aviation product on the market today and 100LL is no exception. For example, some companies just add the cost of the leading facility, the increased value of the high octane alkylate product, the liability risk factor, and other factors to the overhead cost of the refinery.
Shipping from the Refinery is Expensive
Jet A is shipped in large volumes to all parts of the country through pipelines. For example, the airports in Chicago use about 4 million gallons every day, so all of the terminals have a ready supply. It costs a few cents to ship (via pipeline) 8,000 gallons of Jet A 500 miles.
100LL is a specialty product because it contains lead and US pipelines won’t allow it to sully their pipes. 100LL must travel by truck or rail and It costs about $2,000 to ship 8,000 gallons of 100LL 500 miles.
An FBO can shop around for the best price on Jet A, because almost every distribution plant in the country has it. For 100LL, the marketplace is brutal. Less than than 10 refineries produce 100LL in the US and most FBOs cannot afford to buy large quantities. To make it even more con-competitive, in the non-metropolitan areas, FBOs must buy from a single fuel distributor, while in metropolitan areas there might be two distributors. Either way, it’s a seller’s market.
It Gets Worse
The FBOs set their prices based on their situations. For example, some FBOs try to cover overhead expenses through fuel sales. Others want to be GA Friendly, so they lower the price of their 100LL.
Clearly, the industry needs to develop simpler and cheaper fuels for our Mooneys and GA. Perhaps the solution lies in Diesel engines or an unleaded fuel that will safely power the Piper Cub and high performance models. For now, we must be smart about where we take of business and buy fuel from airports that support GA through affordable fuel prices. We can try to encourage our airport managements and local FBOs to find a fuel price that’s good for everyone. There must be a price sweet spot that will benefit the FBO and encourage the growth of General Aviation.
Fly safe and stay out of trouble! JD http://jdpricecfi.com/