Fuel Prices and The Future
 

Just wondering what some of you see when you look into your crystal ball regarding the future of the airline industry and the continued rise in the price of fuel. Where do you see things 5-10 years from now? I am not talking about union's, work rules or management, simply the trickle effect due to rising fuel prices that will continue over the years. When people can't afford to fill the tanks of their cars they surely will not be flying as much. Is that a valid concern for the airline industry? Curious about what YOU think.

Oil is a global commodity. There are only a few things that can drive up the price for a long time....

1) Extended war (major global war, not regional calibrations like Iraq/Vietnam. This is unlikely since most of the potential players are nuclear armed and don't want to go there...and if you're NOT nuclear armed you had better not go there either :eek:

2) Lack of transport or refining capacity...we are seeing this now in that demand for petroleum products has outpaced the construction of refineries. Part of the problem may be the fact that refineries cost billions, and take decades to break even...if massive alternative fuel use is just around the corner, investors may be wary of dumping money into an investment that could become obsolete in ten years.

3) Actually running out of oil...there are a wide range of estimates as to how much oil we have. It depends on demand vs. known stocks, suspected stocks, and stocks that are too expensive to tap with current technology...but as the price goes up, more hard-to-get stocks can be developed. Known and suspected stocks are pretty well identified...we are unlikely to stumble on a 500 year supply hidden at the south pole or under manhattan island. Demand depends on conservation measures and the growth of developing countries. When we actually peak out at max possible production, price will start a very GRADUAL, but permanent rise. Reasonable guesses are that this will happen in 20-100 years. Be aware that all manner of nutjobs have been screaming that we will run out of oil in 20 years... since 1970 :rolleyes:

There is some good news:

OPEC: They will not intentionally drive prices to ridiculous levels. Altrnative fuel technology is already good enough for many applications including ALL personal vehicles (the biggest fuel market). The only thing lacking is a major incentive to deploy the technology NOW. If OPEC drives gas prices too high, alternative technologies will hit the streets big-time, and that market will be gone FOREVER. OPEC is not stupid, they are not going to kill the goose that lays the golden egg. Also they wouldn't want to see six carrier strike groups off their coast either.

As prices do beging to rise, those applications that can easily run on alternatives will do so, easing the pressure on petroleum supplies. Unfortunately there are two applications where current alternative fuels don't work from a technology perspective: Military vehicles (ships, tanks, and airplanes almost all use jet engines) and commercial aircraft. The only "alternative" fuel which would work with our current equipment would be artificialy manufactured kerosene. This can be made, but it's expensive right now.

Air fares: Air fares today are about the same as in 1965...WITHOUT adjusting for inflation! This means that they could rise a great deal and not drive away too much of the traveling public (except for SWA crowd). If you have to pay $350 instead of $175 to go see the folks for christmas, you're probably still going to go, right?

Western-controlled Oil in the Middle-East!! LoL

It's like Brick's comment in the movie Anchor Man

The biggest issue is not how high fuel prices will get, but when will the airlines finally start adjusting fares accordingly for the fluxuations.

There are alternative aviation fuels on the horizon for turbine engines.
I believe P&W has already approved the fuel for use in the engines they manufacture and GE approval is due in the near future.
There are also many available solid extraction methods that are proven, however, they are not viable from a financial risk/return standpoint as of yet.

Our politicians talk a good game but are unwilling to provide the funds necessary to make the advances toward energy independence nor will they create incentives for corporations that may already have the resources and infrastructure available to make this a reality. As long as this issue can be manipulated as a political tool we will see no change in the status quo.

When there is financial incentive to pursue alternatives it will happen.
And we'll still be flying.

At least I hope so.:confused:

Unfortunately, this is a necessary evil of capitalism. When the consumer stops buying enough gas, we'll see new sources. No sooner, no later. Unless we become a true socialist government and implement communist economic policy to fake out the prices. Then all bets are off. At least right now, if the populace really wanted to push the point, we could. Albeit that would be a helluva lot harder than getting a pilot union to work together!

EXACTLY. No need to lose a lot of sleep over running out of oil...there are plenty of alternatives that are more expensive than oil today, but could easily be economically viable if oil prices rise further. Once these technologies get a foothold in the market, economy of scale will drive their cost down further.

Unfortunately, there are no alternative fuels for airliners...the problem is not engines...turbine engines will run on anything that burns (liquid or solid). The M1 Abrahms tank (which has a turboshaft main engine) was once run on peanut butter as a demonstration. The problem for airplanes is fuel handling and storage...kerosene is VERY stable, and has very good specific energy and specific volume compared to any alternative. The only practical alternative is artificial kerosene, which is technically feasible but expensive. Hopefully it will get cheaper (the military is doing research, they need kerosene too). Liquid Hydrogen is about as corrosive as battery acid. It's so dangerous that nasa was afraid to use it for the big Apollo stages...they chose kerosene instead. Hydrogen has been used on dirigibles and the space shuttle however:rolleyes:

Less-energetic alternatives (like natural gas) would provide a drastic range reduction...you'd need a 747 with full tanks to do DEN-LAX.

Just a note, it wasn't the hydrogen that torched the Hindenburg. It was the rocket fuel based dope that coated the fabric skins that blew up. Hydrogen has so little density that at standard temperature and pressure it expands and lifts faster than it can burn. Its of little threat to igniting its surroundings once the container is ruptured. The real issue with hydrogen airplanes is that you either need very heavy cryo tanks or really big, draggy ambient temp tanks. There is also the huge amount of electricity needed to get liquid hydrogen which usually comes from coal and oil power plants.

The big weakness of most non hydrocarbon based fuels is that they require more power to get into a usuable form than their hydrocarbon cousins. Until we build more nuclear, solar, and wind power facilities, we are still slaves to oil and coal.

Agree completely and don't want the slow creep of Socialism but it is already here.
I wasn't clear about my point......our government has money to subsidize crap programs but not to provide incentive to the EVIL OIL COMPANIES(sarcasm) who truly contribute to our comfortable lives.
They are the only ones that I am aware of with the infrastructure and research capability to truly pursue viable alternatives. IMHO capitalism is the only way to achieve success. It provides true incentive to those who are bold enough to pursue a given challenge.
And I believe you are correct about the populace......but we are all waiting on someone else to make the move and the powers that be like it that way.