Very well written! I am interested in reading this in more detail later but I noticed this statement:

But to suggest that it will become a worthless irrelevance denies the fact that for air travel there is no viable substitute for jet fuel on the horizon.

Then you link to Virgin's funding of alternative jet fuel choices. You could also have linked to this work by the US Department of Defense testing jet fuel made from natural gas and coal using existing plants and technology:

Synthetic fuel runs bus, B-52

It seems that you are contradicting yourself. Could you clarify this point?

The link goes to a description of Fischer - Tropsch on Wikipedia

http://en.wikipedia.org/wiki/Fischer_Tropsch

I guess any confusion originates with government strategy.  Branson wants to develop alternative fuels for environmental reasons - no mention of the possibility that there just might not be enough jet fuel to go round come 2012.

Fischer Tropsch uses nat gas, coal or bio-mass as feed stock.  All take CO2 that is currently locked away and sends it into the atmosphere.  I can only imagine that the processing required to make synthetic fuel will increase its CO2 foot print.

A couple of quotes from the Synthetic fuel link:

Development of this technology will advance the Air Force's goals to provide increased capabilities to the war fighter, support our environmental and energy policy requirements and reduce the dependency on foreign energy sources

Engineers expect the fuel will have the same performance as regular jet fuel but with less pollution because it contains less sulfur than regular fuels.

The bit about the environmentaly friendly fighting machine I think is matched only by recent reports that BAE systems are going to develope environmentally friendly shells - low in heavy metals - it really is a joke.  Again the statements are ambiguous - is it environment or energy security that is driving this - or both?

I checked with Robert Rapier before putting this up asking if it were feasible from a capacity point of view to produce enough cellulosic alcohol to keep aircraft flying and he said "The world could probably grow enough food to fuel jets, but not jets and cars".

So I guess I'm scepticle from a capacity point of view that the world's fleet of aircraft could be kept flying on alcohol and from a CO2 point of view that synthetic fuel is a viable option.  But I may be wrong.

Thanks for the link.