Current and Future California SAF Pathways & Supply

By Chuck Sorensen, Ph.D., P.E. LEC Partners

California leads the nation in sustainable aviation fuel (SAF) implementation initiatives.  This is driven largely by the State’s aggressive fuel decarbonization goals and the Low Carbon Fuel Standard (LCFS) incentive program.  SAF fuel blending components also qualify for US EPA RIN credits.  The regional presence and willingness of Silicon Valley venture capital investment and other financiers in Californian “green economy” projects is another positive driver that moves SAF commercialization forward.

AltAir Paramount LLC was the first company to bring California-produced renewable fuels at scale to the California market.  They purchased the former Paramount Oil refinery near Los Angeles in 2013 and converted it from a 50,000 barrel per stream day (BPSD) topping/HDS asphalt and hydrotreated diesel producer into a renewable fuel facility.  It has the capability now to produce over 40 million gal/yr (MM) of renewable naphtha, jet/kerosene, and diesel fuels using non-edible vegetable oil and animal fat feedstock (e.g. beef tallow).  Because the facility already included significant oil processing equipment and infrastructure such as tankage, rail spurs, and transfer piping, AltAir was able to re-use certain equipment and reduce capital investment relative to building a new grass-roots facility.  In addition, re-permitting and community acceptance issues were undoubtedly made easier by re-purposing the old refinery into a more modern and renewable-fuel focused one.  One especially important infrastructure item is the existing freight rail line which allows AltAir to accept up to 25 rail tanker cars of tallow and vegetable oil feedstock per delivery.

Figure 1 – World Energy Paramount Refinery

SAF compatible blendstock made at AltAir uses the approved HEFA-SPK pathway.  The conversion processes include hydrotreating, hydroisomerization, and mild hydrocracking to produce distillate fuel blendstocks for kero/jet and diesel.  Smaller quantities of renewable naphtha and liquefied propane and butanes (LPG) by-products are also made.  Both hydrotreater and isom units were existing reactor vessels that were re-purposed to use catalyst and process technology provided by Honeywell/UOP.  In 2016 AltAir started supplying United Airlines at the Los Angeles Airport (LAX) with a 30/70 blend of HEFA/petroleum kero based jet fuel for limited flights between LAX and San Francisco (SFO).   Renewable and petro-kerosene blending and jet additizing is done at the Paramount facility and finished SAF jet fuel is delivered to LAX by tanker truck.  United and AltAir entered into a supply agreement for at least 5 MM gal/yr for three years with options to purchase more.  For perspective, 5 MM gal/yr and 30% renewable content represents less than 0.1% of United Airlines annual fuel consumption which was almost 4 billion gallons in 2019.

In 2018 AltAir was acquired by World Energy and they have begun working on an expansion plan to go from today’s 3,500 BPSD production volume to 25,000 BPSD.  The expansion project will continue to repurpose other pre-existing equipment, but will also require addition of several process units and infrastructure items.  To provide enough hydrogen (H2) for hydrotreating, World Energy is working with Air Products & Chemicals (APCI) to convert an existing crude oil pipeline into a hydrogen supply line.  Hydrogen is produced by APCI’s steam reformers in Carson and Wilmington, California about 12 miles away.  Other major process additions include a H2 recovery unit, propane/LPG recovery unit, hydrogen sulfide recovery, a flare, and an expansion of the on-site wastewater treatment facility.  The expanded facility is expected to cost at least 350 MM$.

SAF implementation is also being advanced at the San Francisco airport.  SAF is being supplied today to SFO by Neste Oil.  They produce HEFA-SPK type renewable kerosene from vegetable oil and animal fats at their Poorvo Refinery in Finland.  In the summer of 2021, Neste and Signature Flight Services entered into a supply agreement whereby Signature would buy up to 5 million gallons per year of renewable kerosene to make a 30% blended SAF fuel.  Of the 5 million total, 3 million is expected to go to SFO and the remainder to the UK or Europe.  At 30% blend volume, the amount of finished jet fuel delivered to SFO would be 10 million gallons per year.

Signature is the Fixed Base Operator (FBO) at SFO which means they manage all major ground-based airport infrastructure services such as aircraft fueling and the airport’s fuel depot.  However, they do not do any fuel production and blending activities and instead rely on the existing petroleum supply infrastructure.  Jet fuel delivery includes refinery-to-airport and marine-based terminal-to-airport pipelines.  To facilitate delivery of the relatively large volumes of SAF, Neste is engaged with NuStar Energy L.P. which owns the Selby Fuel Terminal near San Francisco.  The terminal includes a dock to accept large tankers and barges, almost two dozen storage tanks of various sizes, pipeline connection to oil refineries and connection to SFO airport via a pipeline owned and operated by Kinder Morgan.

Neste ships renewable kerosene to Houston where it is blended with petroleum to make a nominal 30 or 35% SAF blend.  The finished jet fuel is then shipped to San Francisco by marine tanker ships.  The fuel is off-loaded into NuStar’s tanks and then transported by pipeline to SFO.  It is our understanding that the product is not segregated inside SFO’s fuel terminal but rather co-mingled with 100% petroleum jet fuels present in the tank farm.  An accounting method is apparently used by customers to pay for and take credit for the CO2 reductions that result from SAF use.

In March 2022, Neste and Marathon Oil announced a 50/50 joint venture partnership to convert Marathon’s Martinez California refinery into a renewable fuels facility capable of making 365 MM gal/yr of renewable fuels initially.  By 2023 the facility hopes to produce over twice that amount per year.  Products include renewable diesel, naphtha, and LPG, and optional production of renewable jet fuel.  Financially, Neste intends to invest $1 billion USD in the project.  Similar to what AltAir did in Paramount, the existing refinery’s hydrodesulfurization, hydrocracker, gas plant, hydrogen plant, and fractionation equipment will be repurposed for renewable production.

Refinery feedstocks will include rendered fats, fish oils, soybean, and corn oil, used cooking and vegetable oils, but exclude palm oil.  Existing marine terminals will be used for feedstock delivery.  The refinery is connected to SFO via the Kinder Morgan product pipeline.  The partners have not disclosed information about what specific renewable feedstocks will be supplied to Martinez and who will supply them.  Marathon has established corn and soybean oil collection facilities in the US Midwest to supply their Dickinson North Dakota renewable diesel facility.  Presumably, additional and significant new supply lines need to be created for the Martinez refinery.  In addition to SFO and LAX, other California airports have recently set up limited SAF fuel supplies including Monterey Regional and John Wayne/Orange County.

To meet the growing demand for California airports and Biden Administration goals, several start-up and conventional oil refining companies are developing projects in or near California markets to produce SAF using a variety of process technologies and feedstocks.  The map in Figure 3 shows the location of these facilities.

About the Author: Chuck Sorenson, Ph.D., PE, has a Ph.D. in Chemical Engineering and 40 years of experience with commercializing new chemical & fuel process and product technologies, biofuels & bio-chemicals, conventional oil refinery, and chemical plant operation, process engineering & design, and capital project analysis.  He is the inventor or co-inventor on 35 US patents and consults on matters involving co-processing and upgrading of biomass-based materials in oil refineries, new bio-refining processes to make renewable gasoline, diesel, jet, and marine fuel products, bio-product blending and distribution, and techno-economic evaluation of proposed technologies. Chuck formerly served as CTO/CSO at Anellotech and held a variety of technology, planning, and manufacturing positions at Mobil (ExxonMobil) and Corning.

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