Understanding Fuel: Costs,

Purchasing, Pricing Strategy,

& Internationally

PRESENTED BY:

Walter P. Chartrand

Aviation Training Academy

Schedulers & Dispatchers Conference | New Orleans, LA | January 14-17, 2014

Thursday, 1/17/14 | 8:45 a.m. - 10:15 a.m.

Download the NBAA Scheduler’s & Dispatcher’s Conference App Today

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Pay It Forward

Benefitting:

Dress for Success - New Orleans for Women

Volunteers of America - Greater New Orleans for Men

Drop off clothing at designated spots in the convention center.

First Time Attendee Passport Program

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• 8 stickers required

• Stickers from 5 Educational Sessions

• Visit NBAA Regional Booth # 1256

• Ambassador Resource Desk

• Visit Sponsor Universal Weather and

Aviation Booth # 525

• Must fully complete evaluation

• Must be present at Grand Prize Luncheon

to win TBD!

Guidelines to Win

• Silence your mobile devices.

• If you must take a call, please exit and return quietly.

• Complete and turn in your Session Review before you

leave. Your feedback is important!

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Please remember to…

First a little test…

• As you came in the door you should have

been handed a short and simple

questionnaire…did you get one?

• Please take a moment to answer the

questions to the best of your ability in the first

set of blanks.

• OK…OK… JUST GUESS!

Where does fuel come from?

• Crude Oil…What is Crude Oil?

Complex mixture of chemicals, mainly

hydrogen and carbon compounds called

HYDROCARBONS

• Where is it found ?

Top World Oil Producers and Consumers

Exploration & Production

First oil well ever drilled was in the middle of a

quiet farm community in northwestern

Pennsylvania in 1859

Refineries - Worldwide

Refineries - USA

Refining Process

What is the Primary method

for processing crude oil into

refined products called?

Supporting Slide Heading DISTILLATION

Supporting Slide Heading

• Gasoline – 18 gallons

• Kerosene and Light fuel Oils – 10 gallons

• Residual Fuel Oil – 5 gallons

• Jet Fuel – 3 gallons • Lubricating Oil, Asphalt, Wax - 2 gallons

• Manufacturing Chemicals - 2 gallons

• Other - 2 gallons

The type of crude being processed determines the exact amount of

each product obtained from each particular barrel, but on average…

Gallons distilled from each Barrel (One Barrel = 42 U.S. Gallons)

Aviation Turbine Fuels (Jet fuel) is D-1655 56 different evaluation standards tests

Aviation Gasolines (Avgas) is D-910 33 different evaluation standards tests

Fuel Specifications

ASTM - American Society for Testing and Materials ASTM International is one of the largest voluntary

standards development organizations in the world,

It is a trusted source for technical standards for

materials, products, systems, and services.

Jet Fuel shipping via pipeline

• Pipelines are typically made of steel and vary in size from

12 to 47 inches in diameter

• Multi-product pipelines are designed to transport two or more

different products in the same line

Jet Fuel shipping via pipeline

Jet Fuel shipping via pipeline

Fuel Delivery Terminals

The vast majority of fuel delivered to airports is

performed by over-the-road transport trucks

Transportation

• Over-the-road transport trailers designed to haul aviation fuel, should be “product grade dedicated”

• Although these trailers do not have filtration, the fuel is filtered into the trailer at the terminal, and filtered again when delivered into airport storage

• Inspections of these trailers should occur both before and after loading at the terminal

Product Supply Chain Jet (Typical)

Refinery

Pipeline

Ship / Barge

Rail

Distribution Terminal

Ship / Barge

Pipeline

Rail

Dedicated

Truck

FBO Lab RQC Lab

Manufacturing/blend

Tank

Shipping Tank

Receipt Tank

Shipping Tank

Delivery Terminal

Receipt Tank

Lab

Shipping Tank Dedicated

Truck

Pipeline Ship / Barge

Release

Certificate

Lab

QC QC

QC

QC QC

QC

QC

QC

QC

QC

QC

QC

QC

QC

QC QC QC

Inspection

Refinery Quality Certificate (RQC) Certificate of Analysis (CoA)

Certific

ate

of A

naly

sis

(Co

A)

QC

QC

Specification

verification

QC

Quality Control

Certificate of Analysis

This is the document that is the fuels

“Birth Certificate”

It must show the products test

evaluation results

• Provides information to assist the end user in evaluating the independence

and/or absence of contamination to the material

• Confirmation of test evaluation results matching field evaluation ensure

product integrity

Product receipt checklist

• 21 steps BEFORE

delivery hose is connected

• 8 procedures to start and

ensure safe delivery

• 12 steps to be performed

after load is received

All performed to ensure the correct

product is received clean, dry and

on-spec into the correct tank, without

incident

Fuel Farms

Fuel storage tanks can be single-wall or double wall,

and require pumping, filtering and metering system

Fuel Farms Here is a typical a two product above ground,

fuel storage tanks with delivery system

What does an above ground, double wall, 12K Avgas

and a 20K Jet Fuel storage tank with pump system cost?

Fuel Farms

Estimated costs of a two

product fuel farm

One Avgas, 12,000 gallon double wall tank $ 85,000.00

One Jet 20,000 gallon double wall tank $ 125,000.00

Tanks and delivery system ONLY $ 210,000.00

Installation costs $ 4,000.00

Ground work and concrete $ 3,000.00

Containment with Oil Water Separator $ 100,000.00

Fencing/security $ 3,000.00

TOTAL $ 320,000.00

Larger facilities will have multiple fuel storage tanks

with different delivery systems to ensure product segregation

• 11 Daily checks

• 7 Monthly inspection items

• 10 different Quarterly,

Bi-Annual and, Yearly

inspections

All performed to ensure the

fuel storage tanks are

providing clean, dry and

on-spec into fuel trucks and

aircraft, without incident

Fixed Fuel Facility Checklist

Jed’s Jet Fule

Fuel Trucks

What does a new 5000 gallon Jet Refueler cost?

$175,000.00 - $250,000.00

• 17 Daily checks

• 10 Monthly inspection items

• 9 different Quarterly,

Bi-Annual and, Yearly

inspections

All performed to ensure the

fueling trucks are

providing clean, dry and

on-spec into aircraft,

without incident

Fueling Vehicle Inspection Checklist

Trained personnel…How many hours of training should

an aircraft service technician receive before

being considered qualified?

A minimum of 100 hours of training is required to

qualify for Supervisor certification

Mis-Fueling Prevention Training

Cessna 441 Conquest II

Cessna 421C Golden Eagle

Avgas

Jet Fuel

On-Specification, Clean, Dry Fuel

is the beginning of a safe flight

What is Retail, Contract or Wholesale Fuel?

A. Retail fuel is all gallons paid for to the provider who pumped the fuel

into the airplane. i.e. an FBO

B. Contract fuel is fuel uplifted from a provider and billed to the end

user through a third party. i.e. Colt, Mariah, JetEx

C. Whole sale fuel, is typically bulk fuel (8000 gallons +) that operators

who own a fuel farm can purchase from the fuel dealers at a bulk

rate and store in their tanks for their own use. i.e. Tribute Aviation

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Resellers VS Refiners

A. Resellers – Companies who have purchased large volumes of fuel

from the refiners.

B. Refiners – Companies that produce refined oils and gas for use by

the end users.

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Why Do Operators Use Both Resellers and

Refiners to provide the fuels they

consume?

Simple, to get the most out of the resources the operator has, they will buy

from several different providers. This will ensure the operator they are

paying the lowest price for the fuel they consume.

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Great Hall

Ernest N. Morial Convention Center

Friday, January 17th, 2013 1200-1400

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Schedulers & Dispatchers

Grand Prize Luncheon