Sport Pilot Talk

theoarno · Joined: 26 Mar 2010 Posts: 59 Location: Texas

I thought that this might be interesting for some folks. This fuel is suitable for many ELSA and SLSA aircraft.
I am glad someone has stepped up and made a commitment. This might be doable here in Texas. The cost of 100LL at KAUS is around $7.63 a gallon. I can't imagine this being anymore expensive.

http://www.generalaviationnews.com/2011/07/05/clear-gas-debuts-in-california/#more-45293

Theo

Jack Tyler · Posted: Wed Jul 06, 2011 7:49 am Post subject:

That is an interesting development, and it seems many initiatives - usually profit-motive based - have been springing up as E10 became common and E0 fuels all but disappeared. (E.g. see the Aviation Fuel Club, created by U-Fuel at http://www.aviationfuelclub.org/). In one recent estimate I saw:

What I don't grasp is how Clear Gas and other such providers expect the small GA airport to store & distribute the fuel. Take the local GA airport near my house, KHEG - Herlong Airport near Jacksonville, FL where ~200 a/c are based. Although a smaller (and uncontrolled) field, they have tried to address the impact of higher 100LL pricing by installing a self-service fueling station (which also distributes100LL). So the fuel farm's two tanks continue to hold 100LL & Jet A while the newer, self-service tank also holds 100LL. The demand for fuel is relatively low, which would seem to fit Clear Gas' distribution strategy where demands are 'pooled' for a given area. But where does the FBO put the Clear Gas? Putting it in the self-service tank removes the lower fuel price for the majority of a/c owners based at Herlong, since they can't legally fly with mogas. It can't go in the regular fuel farm avgas tank, as that supplies the tanker which must service both transient and home-based a/c, most of which require 100LL. It's difficult for the FBO to justify yet another fuel farm, along the lines of ther self-service installation, due to the low demand for mogas. Where's the home for the new fuel that's being marketed as a better fuel solution?

Jon V · Joined: 21 Apr 2011 Posts: 156 Location: Dallas...

Why should the small GA airport should have anything to do with storage and distribution?

If you are Clear Gas....

Target the 10 closest airports. Talk to the FBOs. Tell them you will give them a ($0.?? per gallon) stake in any fuel you sell at their airport if they advertise your fuel. While you're at it get an agreement with them (at least the ones with fuel trucks) that they will fuel on your request - it may come in handy later if you have unexpected demand.

Throw together a dispatch web page where an FBO or airplane owner can request a fueling at certain time slots. Time, location, amount. Include billing and everything else you need. Start advertising that to airplane owners at your targeted airports. Include text stating that, in the event you are unable to fulfill an order with your special monkey rah rah bahzzing you will substitute 100ll at no extra charge.

A single truck could meet the demand for a region. If you need more, awesome. It would be beautiful if you actually needed one per airport but don't hold your breath. If things are slow, expand the region and go to cycling zones (Monday you service KXXX, KYYY, KZZZ, Tuesday it is...). I suspect the entire DFW area could be served by one truck and a tank added onto an existing fuel depot somewhere.

There are other models of course but it seems like that would work.

drseti · Joined: 28 Nov 2009 Posts: 1390 Location: Lock Haven PA

Jack Tyler wrote: Where's the home for the new fuel that's being marketed as a better fuel solution?

At KLHV, we're fortunate to have a spare fuel truck, with a 1500 gal fuel capacity. Unfortunately, though we've found a source of ethanol-free 93UL (thanks to aviationfuelclub.org), we have yet to find a transportation provider that will deliver 1000 or so gals to us at a time. We're trying to pull together a bunch of other GA airports in the region, who will make it worth the trucking company's time and effort -- but so far, have yet to achieve critical mass.

Jack Tyler · Posted: Wed Jul 06, 2011 7:48 pm Post subject:

Paul, I noted that fact from an earlier post of yours. In your case, you are indeed fortunate - at least to a degree - to have a place to put the mogas you (hopefully) will bring onto the field. Not many smaller GA airports - and even mid-sized one like the Jacksonville reliever airport, Craig Municipal, with 3 full service FBO's - appears to have a 'spare tank' in a fuel farm or onboard a tanker.

I think that's a fairly typical scenario, and I think it also in part explains why there are so few conventional gasoline stations that carry E0 fuel. They have 4 large underground tanks, each of which needs the main line fuel sold by the station. The E0 gas stations I've seen, very few to date, all have a separate, smaller tank to hold E0 fuel...and of course, must charge a much higher price than E10 91 Octane Premium. But in your case, good luck on finding a hungry fuel hauler.

Jon:
"Why should the small GA airport should have anything to do with storage and distribution?"

Perhaps the above comments help answer your Q? Pretty hard for the local airport to sell what it can't store...

Jon V · Joined: 21 Apr 2011 Posts: 156 Location: Dallas...

Jack Tyler wrote:
Jon:
"Why should the small GA airport should have anything to do with storage and distribution?"

Perhaps the above comments help answer your Q? Pretty hard for the local airport to sell what it can't store...

Not really.

What does the ability of an airport (FBO) to sell this fuel from their own tanks have to do with the success of the product?

When I was a kid I lived in a very modern 1st world area (Orange County, CA) where everyone had safe, plentiful, virtually free potable water available in their homes, just a tap twist away. Yet... every few days a truck would drive down my street with racks of 5 gallon jugs of drinking water, like it was a @^#&ing third world country, and people would pay for the privilege of having their drinking water delivered in jugs like they were living downstream of a lead mine. These jugs were delivered directly to people's homes, by truck, on a regular schedule.

What's wrong with copying that model for this boutique fuel? If you want to feel good about your avgas go to this web page and enter the details of where your plane is, pick a timeslot for fueling, enter a credit card number, and next time the truck is at your airport they fuel your plane and charge you for the fuel. If the FBO is involved at all it is only as a broker.

The FBOs can sell the fuel... same way I can sell you 100 tons of 1018 steel. I don't have it, can't store it, but if you pay me enough I'll have that steel at your doorstep tout de suite. I'll call someone else to drop ship the steel to you. You pay me, I pay them, everyone is happy.

Jack Tyler · Posted: Thu Jul 07, 2011 6:14 am Post subject:

Jon, I guess you just see a very different supply/demand system than I do.

"The FBOs can sell the fuel... same way I can sell you 100 tons of 1018 steel. I don't have it, can't store it, but if you pay me enough..."

Exactly. And since the FBO can't order, receive delivery and store this supply of mogas in bulk, how much do you think the delivery truck will charge per gallon to drive out there and fill up your a/c's 20 gal tank?

The Puritas Water Bottle biz you describe - I grew up in SoCal, as well - was a biz model that worked because a) gasoline was ~27 cents/gal when that biz was flourishing, b) labor rates & benefits costs were far lower, and c) at least in my neighborhood, the water didn't taste all that good (which is why we refrigerated it). That biz model - discrete, small volume delivery - mostly expired decades ago. And BTW it's why the USPS has been recommending weekend mail delivery be ended for two decades now. It's prohibitively expensive.

But if you want to see it differently, that's OK by me.

Jon V · Joined: 21 Apr 2011 Posts: 156 Location: Dallas...

:)

I just did a quick check... a circuit of 9 local airports (which goes right past or around quite a few others... I didn't try to find the closest public airports, just likely ones) is 136 miles and about 4 hours. Say the trucks get 5mpg, and fuel costs $5/gal. It would cost about $220 to make a round of those 9 airports, assuming a single driver. Let's say you average 20 gallons per plane, 2 planes per airport... 360 gallons per circuit. That gives you a per-gallon transport cost of $0.61 per gallon.

Local fueling has costs as well of course. It isn't free to send a fuel truck across an airport to fuel a plane. However, it's a pretty clean subset. Let's say that if a local truck can deliver fuel for $5 a gallon and make money...a truck making a circuit of multiple airports can deliver it for $5.61 per gallon.

Prices for 100ll at the airports on my sample circle range from $5 to $7.67 a gallon with most hovering around $6. Road 92 e0 (if you can find it) is about $4/gal right now. In all cases that's retail, encompassing all delivery costs.

Charge $5 a gallon for mogas, plus maybe a $5 per fueling call-out fee (or, better yet, an annual club membership) because people are used to that nowadays. If you fuel 15 gal per plane on average that's a net of You should make an average of about $10 per fueling, with pilots saving an average of maybe $10 by using you vs. the on-airport FBO. Fuel 36 planes a week (9 airports, 2 planes per airport, 2 circuits of the airports) and you have a pre-tax net of ~$20,000. Lousy, right? Twenty thou a year for two days of work a week, who would do that? Well, more if you owned and drove the truck...about $29K/yr.

As for getting the fuel delivered, you'd be using 6000 gallons every four months or so. I bet you could work up some numbers to justify an existing industrial fuel yard reselling the fuel to you based on that volume.

Now, back to the topic of this thread... Add a $2/gal premium because this is special environmentalist fuel. Your take per plane jumps to about $29. Your sales will go down... let's say they are cut in half. You are still netting about $27,000 a year pre-tax but now you are working one day a week.

Of course if you were the fuel maker you might well be able to franchise that whole thing out.

Just spitballing, of course, and making the huge assumption that people are making money today selling fuel at current prices.

BTW: It wasn't the price of gasoline going above $0.27/ga that killed the water trucks. Cheap filters (carbon pitchers, RO under sink) and retail bottled water took a big bite out, sure, but they are still making their rounds. I worked in an office that had water jugs delivered on those same trucks when I left CA just a few years ago.

drseti · Joined: 28 Nov 2009 Posts: 1390 Location: Lock Haven PA

Jon V wrote: a circuit of 9 local airports (which goes right past or around quite a few others... I didn't try to find the closest public airports, just likely ones) is 136 miles and about 4 hours.

You live in a highly populated area, Jon, with high airport density. Not so simple in the rolling hills of central PA. A circuit of the 9 closest "local" airports around here would take all day and encompass several hundred miles. Different economies of scale in Appalachia, to be sure.

Jon V · Joined: 21 Apr 2011 Posts: 156 Location: Dallas...

If I was trying to make a go of stuff like boutique aviation fuels I would want a higher population density myself.

Higher than around here I mean. Don't let the Texas size delusions fool you, DFW has the geographic size of a regular city but unless you count cattle it's basically empty space. (Where's my straight face emoticon???)

I found it really strange the first time I visited, sorta post-apocalyptic even, since on the map it looks like a city - you see a full network of interstates and highways, multiple airports, everything a city would have - but in person the it's all shrunken and empty. I kid you not there are bovines living within 4 miles of me and I'm well within the kill zone of any nuke dropped on downtown Dallas. I'm not complaining ... the feeling that you have the whole place to yourself can go to your head ... but it's still a bit weird.

In numbers, there are only about 4.5 million people and the average population density is 634/sq mi.

drseti · Joined: 28 Nov 2009 Posts: 1390 Location: Lock Haven PA

Jon V wrote: the average population density is 634/sq mi.

Damn, Jon, that's crowded! In Lycoming County PA the population density is all of 97/sq mi.

Quote: (Where's my straight face emoticon???)

I use colon hyphen pipe. looks like :-|

Jon V · Joined: 21 Apr 2011 Posts: 156 Location: Dallas...

drseti wrote: Jon V wrote: the average population density is 634/sq mi.

Damn, Jon, that's crowded! In Lycoming County PA the population density is all of 97/sq mi.

No, where I spent my teen years through early 30s (Greater LA, pop: ~7,000/sq mi) is crowded.

Where I lived before that (Suburban South OC, pop: ~4500/sq mi) is crowded.

Where I was born (Capitol City, USA - the actual capitol city, not that wannabe Californian place - pop: ~9,000/sq mi) is crowded.

Dallas has a lot of cattle where I would expect homes and businesses. Lycoming County, PA sounds like vacant land. ;)

I'm not a fan of crowded, mind you. I fully intend to end my days somewhere in Wyoming maybe, sitting on my porch, in an old rocking chair, shotgun propped up beside me, watching as no cars drive the miles of dirt road between me and all those other people, comforted by the knowledge that at least in my little area the population density isn't 600/sq mi, or 60/sq mi., but 1/.... :-|

theoarno · Joined: 26 Mar 2010 Posts: 59 Location: Texas

Actually the Idea of driving a truck from airport to airport sort of makes sense in areas where there is a high density of airports. But you would need to sell a lot more than 360 gallons of fuel taking into account the high cost of having relatively small amounts of custom gasoline blended to your specifications.

But lets say that the deliveries were scheduled for Friday, Saturday, and Sunday, and the airports that were targeted had a larger number of MOGAS burning aircraft. Not just 2 or 3.

A lot of GA A/C are coming off of the production line capable of burning mogas

IF the vendor were willing to just break even or maybe even loose money for the first year then the demand may become high enough that some FBO's would be willing to add another tank.

Also the vendor may need to subsidize the cost of installing a tank.
I wonder if one of those 500 gal above ground tanks would be legal?

Jon V · Joined: 21 Apr 2011 Posts: 156 Location: Dallas...

theoarno wrote: ...and the airports that were targeted had a larger number of MOGAS burning aircraft. Not just 2 or 3.

I chose my numbers to show just how low a threshold you really need to cross to make it worthwhile for at least some levels of entrepreneur. I agree that you could realistically expect them to be much better, but they don't really NEED to be better to make it worth someone's while. The airports I mapped to figure the travel distance had collectively over 1000 single engine (non-jet) airplanes. I don't know the percentage of those craft which are designed/STCed for mogas but figure it out and you could make a more optimistic estimate of the potential market.

However...

There are plenty of people who do things like buy parking lot sweeping trucks, tow trucks, and the like and are very happy to see a return on investment on the order of $27,000 a year for themselves. The idea that someone would buy an aircraft fueling truck for a similar level of reward doesn't seem farfetched.

Side note: This is a field rife with bad math. For example, the AOPA says:

"It is estimated that approximately 30 percent of the existing GA piston engine fleet uses approximately 70 percent of all 100LL produced. Of those aircraft that use 70 percent of the 100LL produced, most demand the performance that 100LL provides.

"The remaining 30 percent of the 100LL avgas consumed could be replaced by some of the existing unleaded fuels currently available, many with limited availability."

:shock:

Just wander around an airport that has tiedowns.... you'll see a LOT of planes that haven't flown in months or years. It would be fair to say that 30% of airplanes do 70% of the flying. It in no way follows that the "remaining 30%" of avgas consumed could be replaced by existing unleaded fuels. It may be true, it may not be true, but it doesn't follow from what they said.

theoarno · Joined: 26 Mar 2010 Posts: 59 Location: Texas

The profit margins for gasoline are in the cents per gallon not the dollars per gallon.