The camelina plant has long been considered a potential source for biofuel because of the oil the crop produces. A new Oregon State University study shows that that oil could become an economically feasible alternative to conventional jet fuel under certain market conditions.

Camelina is a well-researched plant that shows promise to be an income producer, and the benefit is that the crop performs well when planted on marginal land. It also has potential as a rotation crop with wheat, which has value in preserving soil where fields are left fallow.

Trouble is that today's current prices for kerosene-based jet fuel makes it unprofitable to use camelina-based jet fuel. Right now, camelina based jet fuel costs about 60 cents more per gallon than conventional jet fuel. However, OSU researchers did look into what might have to happen in the market to give camelina-sourced jet fuel a viable alternative.

Jeff Reimer, an economist in the College of Agricultural Sciences and the study's lead author, says: "Farmers won't grow [camelina] unless there is a market for it, and they don’t have a market unless refiners have a place to sell it. That's the supply chain problem."

However, there is some camelina-based jet fuel in use. The U.S. Air Force is already using camelina fuel in some of its aircraft. Reimer says "substantial government intervention" would be one way to create a market for camelina for use as a commercial aviation biofuel. He noted three alternatives:

• a 17% subsidy on camelina crop production
• a 20% tax on conventional jet fuel
• a combination 9% subsidy on the alternative fuel and 9% tax on the conventional fuel

Camelina would also be a practical alternative if airline passengers voluntarily elect to pay more to travel, if they perceive an environmental benefit in using the oilseed, Reimer says. That would allow airlines to use the proceeds to offset the higher cost.

Reimer also brings some reality to the conversation: "This case is unlikely to arise in the real world. This biofuel works brilliantly. A number of airlines want to buy it. But we are in an era of very low oil prices. If airlines are using millions of gallons of fuel per year, it would cost them too much to switch."

He notes there is strong interest in bio-based jet fuel in the region, either for diversifying their fuel sources or for perceived environmental reasons. A key value is that camelina can be a "homegrown" fuel source with low production costs; but even if grown locally, processing may happen outside the region.

Or, Reimer says, if processing is done within the region, the camelina could perhaps be sourced most efficiently from outside the region, such as from Canada. But this would dilute the "homegrown" story.

It's a complicated economic question, and one that often faces biofuels. Reimer notes that it actually might be cheaper to produce both the camelina and camelina-based aviation fuel in Canada and import it to the United Sates, but he added, "That wouldn't benefit American farmers or processors."

Bio-based fuel sources bring along their own set of economic questions and concerns.

Ziojuan Zhen, a doctoral graduate of OSU who now works for Dell Corp., co-authored the study. USDA's National Institute of Food and Agriculture partially funded the research.

Source: Oregon State University