Understanding Fuel: Costs, Purchasing, Pricing Strategy, & Internationally

Transcription

1 Understanding Fuel: Costs, Purchasing, Pricing Strategy, & Internationally Thursday, 1/17/14 8:45 a.m. - 10:15 a.m. PRESENTED BY: Walter P. Chartrand Aviation Training Academy Schedulers & Dispatchers Conference New Orleans, LA January 14-17, 2014

2 Download the NBAA Scheduler s & Dispatcher s Conference App Today 2

3 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.

4 First Time Attendee Passport Program Guidelines to Win 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! 4

5 Please remember to 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! 5

6 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!

7 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?

8 Top World Oil Producers and Consumers

9 Exploration & Production First oil well ever drilled was in the middle of a quiet farm community in northwestern Pennsylvania in 1859

10 Refineries - Worldwide

11 Refineries - USA

12 Refining Process What is the Primary method for processing crude oil into refined products called?

13 DISTILLATION Supporting Slide Heading

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15 Gallons distilled from each Barrel Supporting Slide Heading (One Barrel = 42 U.S. Gallons) The type of crude being processed determines the exact amount of each product obtained from each particular barrel, but on average 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

16 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. Aviation Turbine Fuels (Jet fuel) is D different evaluation standards tests Aviation Gasolines (Avgas) is D different evaluation standards tests

17 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

18 Jet Fuel shipping via pipeline

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20 Jet Fuel shipping via pipeline

21 Fuel Delivery Terminals

22 The vast majority of fuel delivered to airports is performed by over-the-road transport trucks

23 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

24 Product Supply Chain Jet (Typical) Refinery Distribution Terminal Delivery Terminal Refinery Quality Certificate (RQC) Certificate of Analysis (CoA) Manufacturing/blend Tank QC Specification verification Rail Pipeline QC Ship / Barge Receipt Tank QC QC QC QC Rail Ship / Barge QC Pipeline QC QC QC QC Receipt Tank QC Shipping Tank Lab Certificate of Analysis (CoA) Shipping Tank Lab RQC QC QC Shipping Tank Lab QC Dedicated Truck Release Certificate Dedicated Truck QC Pipeline QC FBO QC QC Ship / Barge QC Lab Inspection

25 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

26 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

27 Fuel Farms Fuel storage tanks can be single-wall or double wall, and require pumping, filtering and metering system

28 Here is a typical a two product above ground, Fuel fuel Farms 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?

29 Fuel Farms Estimated costs of a two product fuel farm One Avgas, 12,000 gallon double wall tank $ 85, One Jet 20,000 gallon double wall tank $ 125, Tanks and delivery system ONLY $ 210, Installation costs $ 4, Ground work and concrete $ 3, Containment with Oil Water Separator $ 100, Fencing/security $ 3, TOTAL $ 320,000.00

30 Larger facilities will have multiple fuel storage tanks with different delivery systems to ensure product segregation

31 Fixed Fuel Facility Checklist 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

32 Fuel Trucks What does a new 5000 gallon Jet Refueler cost? Jed s Jet Fule $175, $250,000.00

33 Fueling Vehicle Inspection Checklist 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

34 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

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37 Mis-Fueling Prevention Training Avgas Cessna 421C Golden Eagle Jet Fuel Cessna 441 Conquest II

38 On-Specification, Clean, Dry Fuel is the beginning of a safe flight

39 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 39

40 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. 40

41 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. 41

42 Schedulers & Dispatchers Grand Prize Luncheon Great Hall Ernest N. Morial Convention Center Friday, January 17 th,

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