Rentech Inks Biofuel Deal with Eight LAX-Based Airlines for Their Ground Utility Vehicles

Aug.18.09 | About: Rentech, Inc (RTK)

By Michael Kanellos

Rentech (NYSEMKT:RTK), which makes biofuel from a modified version of the Fischer-Tropsch process, has signed a deal with eight airlines to provide their ground utility trucks at Los Angeles International Airport with 1.5 million gallons of fuel annually. That's enough to handle all of the the needs of ground service trucks, according to Rentech.

The deal will go through in 2012, when Rentech's plant will be complete.

The deal marks another step in the slow, but steady, slog toward biofuels, and it makes sense. Unlike cars, utility trucks at an airport never stray far from home. Thus, a centralized biodiesel pump can serve them. It also allows the city to tout its green credentials and help U.S. businesses with local operations.

Will the trucks emit tailpipe fumes? Yes, but since the carbon originally came from terrestrial sources instead of underground, it's relatively carbon neutral. In a carbon trading world, that's another plus.

Rentech's fuel is made with biomass. Fischer-Tropsch was originally conceived in 1920 to convert coal to liquid fuel. The coal process has always been expensive and dirty, which explains why only the Third Reich and embargo-addled Apartheid South Africa were the only two nations to heavily rely on it. In F-T, the feedstock is heated to high temperatures, converted to a synthetic gas and ultimately turned into a liquid. A couple of other new age ethanol companies like Range Fuels are exploiting thermochemical processes, but biological remediation (i.e., having super microbes chew up plant matter into fuels) appears to be more popular with startup investors and entrepreneurs.