Charity DeLuca, Vice president of Research Relations at LiveFuels in San Carlos, Calif., works with different algae samples in July. Behind the scenes, the airline industry is aggressively pushing for homegrown alternatives to petroleum-based jet fuel. A coalition that includes the Federal Aviation Administration and airline, manufacturing and airport associations wants standards for a 50 percent synthetic jet fuel approved by the end of this year..

Chemist Emma Kate Payne displays a fuel sample created from algae at LiveFuels.

Phoenix ? With the price of oil still above $100 a barrel, everything from wood chips to chicken fat is being scrutinized as an alternative to traditional fuel. But when it comes to airplanes, finding the right mix poses a special challenge.

“When you’re in an airplane, you don’t want your fuel to start solidifying,” said Robert Dunn, a Department of Agriculture chemical engineer who is studying biodiesel jet fuel.

The airline industry is pushing for homegrown alternatives to petroleum-based jet fuel, while leaning on customers with a variety of new travel charges to help control a projected $61 billion industrywide fuel expense this year.

A number of alternatives to standard jet fuel have been studied for years, though aircraft manufacturers say the challenge is to find ideas that will work now.

Finding the right option

Jet engines can be retrofitted to run on hydrogen, for example. But hydrogen does not pack the same punch as traditional jet fuel – kerosene – and would require airlines to buy planes designed with massive tanks. That is a tough choice for cash-strapped carriers, said Billy Glover, managing director of environmental strategy at Boeing Commercial Airplanes.

The best bet right now for nonconventional fuel comes from South Africa, experts said. The country has powered its airline industry for a decade using a coal-based jet fuel blend developed by petrochemicals group Sasol. It’s a “synthetic” fuel, which means it can be used without altering engines or other aircraft equipment.

A number of U.S. companies are developing a variety of similar synthetics. Airline experts say three companies could provide as much as 3 million gallons a day of synthetic fuel by 2012: American Clean Coal Fuels of Portland, Ore., Baard Energy in Vancouver, Wash., and Rentech Inc. of Los Angeles.

Though significant supplies will not be ready for several years, the Commercial Aviation Alternative Fuels Initiative (CAAFI) – a coalition that includes the Federal Aviation Administration and airline, manufacturing and airport associations – wants to set standards by the end of the year for a 50 percent synthetic jet fuel. CAAFI wants standards for a totally synthetic fuel ready in two years.

‘Chicken-and-egg’

Executive Director Richard L. Altman said the push for new fuel standards is meant to show investors that airlines will buy synthetic fuel. Doing so will send needed dollars to energy startups that may one day replace foreign oil, Altman said.

“Nobody will invest unless the fuel is certified,” he said. “So we have a bit of a chicken-and-egg problem.”

With more companies investing in alternative energy, the thinking goes, the more synthetic jet fuel eventually becomes available, making it easier for airlines to unshackle themselves from petroleum markets.

Meanwhile, Boeing and Air New Zealand later this year will test a biofuel made from the oil-rich seeds of the jatropha tree, a Mexican plant that grows in warm climates. Other synthetic fuel tests will follow on Continental Airlines and Japan Airlines flights. In February, Boeing partnered with Virgin Atlantic to test a flight that included a biofuel mixture of babassu oil, which comes from a palm tree in northern Brazil, and coconut oil.

Potential challenges

Many biofuels may create more problems than they solve, however. Edible feedstocks such as corn and sugar could raise the price of food. And palm trees for babassu and coconut oil could lead to clearing large chunks of rain forest.

These are some of the reasons why algae-based synthetic fuel is getting a lot of attention.

Algae is inedible, and it has a relatively high yield compared with other crops, using less land to produce the same amount of oil.

“It can be grown anywhere you can have a pool of water and expose it to sunlight,” said Stanford Seto, an expert in aviation fuels who works with ASTM International, a Pennsylvania-based organization that develops standards for jet fuel.

Investors have pumped almost $84 million into companies developing algae-based fuel so far this year, according to the Cleantech Group, an industry research firm.

A long wait

Despite its promise, it will be years before algae biofuel could be sold at a price that would make sense to an airline, said Dave Jones, co-founder of LiveFuels, an algae fuel startup in San Carlos, Calif.

“If anyone is below $50 a gallon, I’d be stunned,” he said.

Even if prices come down, most airlines see synthetic fuel as a chance to run a greener airline, not necessarily a cheaper one, said Nancy Young, vice president of environmental affairs for the Air Transport Association.

“You aren’t going to find a fuel that’s pennies on the dollar than what we find today,” she said.

For travelers, that means that fewer flight options and charges for checked bags, drinks and other items are here to stay.