Flying is increasingly seen as a frivolous indulgence harming our efforts to slow down the warming of our planet. Politicians and campaigners alike are noting that we ought to change our travel behavior and airlines are feeling the heat.
Yet flying people and goods isn't without its benefits. Air transportation has made the world smaller and exposed many people to new cultures and locations, it provides us with fresh produce from far corners of the planet and powers complex supply chains. At the same time, jets have become remarkably more efficient and quieter over the past decades. To fly less would return us to a more insular, narrower version of the human condition.
So while airlines are busy touting their off-set programs as a means of making their services more socially acceptable in the modern world and environmentalist are lambasting these very measures as mere fig leafs and attempts to green-wash the "unconscionable", the debate seems to be trapped in a binary perspective that ultimately only allows fore more restrictions on air travel as the only viable outcome.
Yet this approach is deeply flawed, it assumes that arresting our development as a global civilization is somehow the correct answer to averting climate change Armageddon. It denies or selectively ignores the technological progress made in recent years that enables already mature solutions we have at our disposal today. In doing so it also robs us of the will to enact policy to accelerate implementation and scaling of such solutions.
Okay enough of the abstract talk, so how do we grow air travel and air freight, make it cheaper and more accessible with all the attendant economic benefits and save the planet along the way?
Synthetic fuels are the simple and obvious answer. As another blog post will demonstrate, we have now reached a point whereby we can create custom engineered synthetic fuels at prices cheaper than anything we can potentially extract from an oil well. More importantly we can now do this without encroaching on valuable crop land for food production or harder to scale algae based bio reactors as used for bio-fuel production.
Synthetic fuels create a closed cycle that constantly reuses atmospheric carbon as an energy carrier for our existing transportation infrastructure.
Synthetic fuels require fundamentally three inputs, carbon dioxide, hydrogen and energy. In the past all three ingredients were either difficult to come by or simply expensive. But over the past 5 years everything has changed.
Two companies now have working scalable closed cycle direct from air CO2 capture systems available. The only constant input into these systems is energy in the form of heat and electricity. Large scale hydrogen production from electrolysis of water is also easily within our grasp assuming we have cheap electricity to drive the process.
As should be obvious by now the real crucial input that defines the viability of synthetic fuels is then the cost of electricity. In a world where we pay 8-10 cents per kilowatt hour synthetic fuels are hopelessly uncompetitive. Yet solar plants are currently able to deliver power at 2c per kW/h and will soon drop beyond 1c per kW/h. At 2c synthetic fuels are already becoming competitive with refined fossil fuels, at electricity prices below that they become cheaper and cheaper until they beat even the cheapest oil wells in the world.
There are several technologies on the horizon that could also cause solar electricity prices to fall by another order of magnitude to fractions of 1c, faster still than the already relentless pace of cost reduction for conventional photovoltaic driven by the inherent dynamics of manufacturing economics.
Therein lies the potential of synthetic fuels, their price structure follows a manufacturing rather than a resource model. As demand increases prices come down due to economies of scale, rather than being driven up by scarcity.
Well great? So what do we need electric cars for then? Or why bother when we soon will be flying on electric planes? This is where policy comes into play. Scaling synthetic fuels will still take time and policy must ensure they get allocated to sectors that would otherwise take longer to convert to climate friendly alternatives.
Electric long haul jets are still over the horizon and airplanes like ships have a relatively long asset life. 20 years of service is not unusual. Cars on the other hand have a mature electric alternative available and are replaced more quickly by comparison on average. Trucking and diesel trains sit somewhere in between the two categories but have viable electrification paths through last mile electric delivery and long range electrified rail freight.
So policies that allow for synthetic fuels to displace fossil based ones, with all the attendant complications for the petrochemical sector, will need to take all of the above into account. Furthermore they must continue to reward efficiency to maximize the benefits during the ramp up of synthetic fuel production.
This might also mean de-prioritizing access to synthetic fuels for car use in favor of ongoing incentives to foster a transition to purely electric personal mobility. This will ensure that synthetic fuels are directed to the the aviation and marine sectors until sufficient production capacity exists to take on the remainder of trucking and vintage car use.
So in practice this would mean taxing fossil based marine and aviation fuels heavily while allowing for tax exemption for the most efficient users of synthetic fuels. Older, less efficient aircraft and ships running on synthetic fuels should still be subjected to a significantly lower fuel taxes burden compared to those running on fossil based energy.
Whether tax revenue from these endeavors is used to fund transition efforts elsewhere in the transport system is out of scope here.
What would be the effect, beyond removing CO2 emissions from the global transport system due to the closed cycle nature of synthetic fuels, on our civilization? Long haul transportation costs for goods and people would decline and economic activity would increase making this transition a major contributor to economic growth. Furthermore, a switch to synthetic fuels would also remove a major source of risk and input cost volatility from the transport sector. When synthetic fuels follow a manufacturing rather than a resource pricing models planning becomes easier and hedging becomes unnecessary.
However, synthetic fuels also, at least in theory, remove some drivers for efficiency from the system. This is where policy action has to take up the slack to ensure aircraft manufacturers and ship builders strive for continued improvement of their products.
Obviously a lone blog post like this one can only scratch the surface of the issue and yes there are infrastructure and land costs associated with moving the global bulk transportation system to synthetic fuels. But plant building of large industrial infrastructure such as the electrolysis, carbon capture and Fisher-Trops plants is not dissimilar to existing chemical and oil refining infrastructure and is thus a relatively well understood art. The worlds sunniest regions are also least viable for human settlement and agriculture and thus lend themselves well to large scale solar power generation. Finally, all processes involved do lend themselves to intermittency matching well the cyclical availability of cheap solar power.
Although it should be noted, some experts see anything but full time asset utilization for synthetic fuel plants as not economically viable, at least in a world where power is still above 5c/kWh. For anyone interested we highly recommend using this comprehensive cost calculator by Agora (excel required) to test out various scenarios.
It is true that in the long run breakthroughs in battery technology or new methods of aircraft and marine propulsion may displace even synthetic fuels as more efficient and cheaper alternatives and thus synthetic fuels maybe a transition technology that is only relevant for a few decades. However, this should not deter us from pursuing them at scale. Synthetic fuels provide the unique opportunity to neutralize carbon emissions from the transport sector as a drop-in at-scale replacement within less than a decade.
This blog post is the first in series that will explore the impact of ever more affordable renewables on our economic system. Some of of these impacts will be of a geopolitical nature, some will lead to the rapid demise of existing blue chip corporations, and some will create new fortunes. These technologies hold the potential to unshackle our economic and social development from the scalability constraints of the fossil fuel based area, making such a transition a necessary step in the evolution of our species, likely even more profound than the transformations heralded by the first industrial revolution brought about by coal and steam.