A Japanese oil refiner is seeking permission to bring jet fuel by tanker into the Port of Anchorage, a move that could help cure what has been a costly problem for the air cargo industry.

Cosmo Oil of USA Inc., a Torrance, Calif., affiliate of Tokyo-based Cosmo Oil Co. Ltd., has applied to the Alaska Department of Environmental Conservation for an oil discharge prevention and contingency plan, or C-plan.

Oil and fuel shippers are required to have a highly detailed plan for responding to spills before they can operate in state waters.

If Cosmo's plan is approved, it will be the second fuel provider to recently obtain permission to ship jet fuel through Cook Inlet to the Port of Anchorage.

DEC officials have already approved a C-plan amendment to allow Anchorage-based Delta Western Inc. to bring tank vessels into Cook Inlet. Delta Western is a major distributor of fuel and other petroleum products around the state, including Southeast, Western Alaska and Dutch Harbor, one of the nation's top commercial fishing ports.

JET FUEL CRUNCH

The potential arrival of new supplies of jet fuel comes as welcome relief to the air cargo industry, which uses Anchorage's international airport as a major fueling and package-sorting stop on flights between Asia and North America.

This summer, state officials grew anxious when as many as 25 wide-body cargo jets per week were simply flying over Anchorage rather than stopping due to lack of jet fuel availability. Typically, the Anchorage airport sees some 600 landings of big cargo jets per week.

Such overflights are expensive for air carriers, who must displace revenue- generating cargo to carry more fuel, as well as Alaska's airport system, which was on track to lose $1 million a year in revenue.

Two key factors play into the jet fuel shortage.

First, the state long has grappled with a shortage of in-state fuel production relative to the huge and somewhat seasonal need at the Anchorage airport. The state has four refineries that can make jet fuel -- the Flint Hills Resources refinery at North Pole near Fairbanks, the Tesoro refinery at Nikiski, and two Petro Star Inc. refineries at North Pole and in Valdez.

The Petro Star refineries supply jet fuel to the military, while the Tesoro refinery can produce only limited amounts of jet fuel as part of its production mix.

The big jet fuel producer is Flint Hills, which sends its output by train to Anchorage. Flint Hills production, however, has been irregular as the company struggles to make the plant economic. Coming into the summer, Flint Hills reactivated a third crude oil processing unit to help alleviate what could have been an even worse jet fuel crunch.

The second factor driving the jet fuel shortage has been a strong and welcome rebound in air cargo traffic through the Anchorage airport as the U.S. recession eases, airport managers say. This was a factor in Flint Hills bumping up its production.

But a worry is that Flint Hills will move to partially shut down its refinery this fall to avoid having to do the job in bitter cold conditions.

This raised the specter of jet fuel shortages during the peak season for the air cargo business, October through November, as shipments rise for the holidays.

WHO IS COSMO?

The arrival of Cosmo and Delta Western on the scene could help fill the supply gap just at the right time. Having fuel available is key to keeping Anchorage among the top air cargo hubs in the world.

"That could fall off in a heartbeat if we don't have reliable fuel," said Jim Hemsath, deputy director at the Alaska Industrial Development and Export Authority.

Anchorage faces competition as an air cargo stop from Vancouver, British Columbia, and Seattle.

Jet fuel shipments into the Port of Anchorage, even from foreign sources, are not all that unusual, state officials say. It happens.

But Cosmo is a new entrant into Alaska, its C-plan application indicates.

According to its application, Cosmo plans to operate double-hulled, spot charter tankers between Sakai, Japan, where the company has a refinery, and Anchorage.