Taking Flight on Natural Gas: Will Airlines Use Shell's Gas-to-Liquids Jet Fuel?

(MoneyWatch)  When a Qatar Airways plane landed in Doha late Monday, it became the first commercial passenger flight to use fuel from natural gas.

But like all "firsts," the second, third and ten-thousandth time is a bit harder to reach. Cost tends to be the stickler in each one of these alternative jet fuel attempts.

This "natural gas first" follows other forays into alternative forms of jet fuel. Algae has been a popular trial biofuel for airlines including Continental Airlines. Virgin Atlantic has tried the coconut, babassu oils mixture and Solazyme nabbed a U.S. Navy contract for its algae-based jet fuel.

The alternative jet fuel developed by Royal Dutch Shell for the Qatar Airlines flight provides a modicum of commercial promise.

For one, the gas-to-liquids jet fuel is part of a much larger project -- dubbed Pearl GTL -- being built by Shell and Qatar Petroleum. Pearl GTL is expected to be complete by the end of 2010 and will eventually produce five gas-to-liquid products in commercial volumes.

The GTL jet fuel used in the Qatar Airways flight is a 50-50 blend of gas-to-liquid kerosene and conventional oil-based kerosene fuel. By 2012, Pearl GTL is expected to produce about one million tons of GTL kerosene each year, Shell said. That's enough to carry 250 passengers around the world 4,000 times, according to the company.

What the heck is gas-to-liquid fuel?

Shell essentially took a chemical process invented in the 1920s by German scientists Franz Fischer and Hans Tropsch and gave it some advanced tweaks. Shell partially oxidizes the natural gas at a high temperature and pressure to convert into a synthesis gas. The synthesis gas is chemically converted using the Fischer-Tropsch process into a white wax or synthetic crude. From there, the wax is broken down into a product that can made into GTL fuels as well as naptha and normal paraffin.

Secondly, the International Air Transport Association has announced its "four-pillar strategy" to reduce its carbon footprint. Alternative fuels will certainly be a part of that plan. If Shell can reduce the cost of the GTL fuel and make it somewhat competitive to say regular old jet fuel, it would be an attractive alternative.

And finally, its Qatar, the world's largest producer of liquefied natural gas and soon to be a major GTL fuel producer as well. The proximity to the Pearl GTL product and the actual natural gas source makes it a smart local choice for the airline.

Question is whether other airlines -- namely those that fly far from Qatar -- will jump on board?