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Saturday
Dec292012

Military Biofuels Survive Republican Congressional Euthanasia Attempt

Contributed by John C.K. Daly of Oilprice.com.

During the heated presidential debate, Republicans aimed at the military’s interest in renewable fuels, with both House and Senate Republicans introducing legislation to prohibit the Pentagon from buying any fuels with a price tag greater than those of traditional fossil fuels. But what a difference a couple of months make.

Those efforts have apparently fallen by the wayside, as unofficial reports indicate that biofuels provisions have survived a House-Senate conference over the upcoming National Defense Authorization Act legislation.

According to Capitol Hill sources, speaking on condition of anonymity, original House of Representatives text prohibiting Department of Defense spending on biofuels has been removed and replaced with a requirement that DOD funding be matched by the Department of Energy and the department of Agriculture. Giving heart to biofuel proponents, the USDA has already committed funds, while DOE funding is contingent on appropriations.

Pentagon interest in biofuels is not a recent event, but has been gridlocked by Washington power plays. The 2007 Energy Independence and Security Act mandated that the country’s fuel supply include 36 billion gallons of biofuel by 2020, three years later, 2010 the USDA reported that to meet the mandate, 527 new bio-refineries would be required at a cost of 4168 billion to meet demand.

Shortly before his inauguration in January 2008 President-elect Obama promised to invest $150 billion over the next decade to develop biofuels, plug-in hybrid vehicles, renewable energy production and a skilled work force for clean technologies.

Obama made clean energy a centerpiece of his administration’s policy from the outset. In recognition of the potential of the US bio-economy, in July 2010 the Obama Administration issued an Executive Memorandum called ‘Science and Technology Priorities for the FY2012 Budget’ (M-10-30), which mandated a priority for federal agen¬cies to “support research to establish the foundations for a 21st century bio-economy.”

The following year, during his State of the Union address on 25 January 2011 Obama said, “This is our generation's Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. And in a few weeks, I will be sending a budget to Congress that helps us meet that goal. We’ll invest in biomedical research, information technology, and especially clean energy technology - (applause) - an investment that will strengthen our security, protect our planet, and create countless new jobs for our people. Already, we’re seeing the promise of renewable energy.”

Obama’s initiatives gathered substantial support. Enter the Pentagon.

In January 2010, USDA Secretary Tom Vilsack and Secretary of the Navy Ray Mabus signed a Memorandum of Understanding to develop advanced biofuels and other renewable energy systems for commercial and military transportation needs. Two years later USDA Under Secretary Dallas Tonsager signed an agreement with the Airlines for America on a “Farm to Fly” project, investigating feedstock and infrastructure needs for the development of a U.S. aviation biofuels industry.

In October 2010 the Navy purchased 20,055 gallons of algae biofuel at an eye-watering cost of $424/gallon.  Nevertheless, the contract was one of the biggest U.S. purchases of a non-corn ethanol biofuel up to that time. A year later, the Navy reportedly spent $12 million for 450,000 gallons of biofuel. The bad news was that the biofuel’s cost worked out to around $26.67 per gallon, roughly six times the current cost of traditional gas.

In January 2011, bringing together three different federal agencies, Secretaries Vilsack, Mabus and Department of Energy Secretary Steven Chu signed an agreement to work with private industry to develop drop-in biofuels for military and commercial use (drop-in biofuels are direct replacements for existing gasoline, diesel, and jet fuels that do not require changes to existing fuel distribution networks or engines).

Building on that momentum, the White House in its ‘Blueprint for a Secure Energy Future’, released on 30 March 2011, again emphasized its commitment to developing the US biofuel sector with a USD800 million commitment for advanced biofuel projects. After noting that “the Administration is investing in the research and deployment of alternative fuels that can be safely used in the aviation sector”, the document continued: “Competitively-priced drop-in biofuels could help meet the fuel needs of the Navy, as well as the commercial aviation and shipping sectors.”

But all of this eventually bogged down in bipartisan gridlock. Last autumn, U.S. House of Representatives along with Sentate Republicans introduced legislation to ban the military from purchasing or developing biofuels if they cost more than traditional fossils fuels.

Given the new political realities, both Congressional initiatives have fallen by the wayside, with both the House and Senate having been forced to harmonize their variant versions of the annual National Defense Authorization Act (NDAA) appropriations bill. With the “fiscal cliff” approaching, the final version, earlier this week, removes attempts to block the DoD’s biofuels program.

But renewable fuels advocates are hardly out of the woods yet – they have 12 months to deliver before military appropriations issues reemerge, and only the most ardent optimist at this point can assume that the 2012 DoD appropriations will include fiscal largesse for all military “guns and butter” – err, vegetable oil biofuel – needs. By John C.K. Daly, cross-posted from Oilprice.com

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Reader Comments (1)

A lot of issues to consider.
1. An army should under all circumstances be able to act as an army (aka shoot the bad guys when necessary). So imho a pilot like this should never intervene with the combat capability of an army. No 'having to fly biofuel to Farawayistan as otherwise the hardware cannot operate. So bifuel and interchangable with other stuff and other vehicles.
Higher prices for a pilot like this however (likely providing it is not on a massive scale) is simply a political choice. If politics is willing to pay double for 5 or 10% of the fuel that is mainly a political choice.
However one also would have to look if there are cheaper/better alternatives available for this pilot.

2. Energy (the affordable kind) is crucial for our economy. Long term energy supply however is clearly not assured.
Problems could arise mainly in the following:
-quantity (simply not enough of the stuff);
-time (takes along time to move from one source of energy to another);
-price (energy in general or in the present form simply becomes very expensive and as such works as a huge drag on the economy (and our standard of living);
-polution (in any form).
-political misses (like with the economy and the budget now, why would politicians not be able to screw this one up as well).
As it looks now we will most likley see a combination of these factors, but also possible that we will see say the next 1/2 century nothing only a lot of taliking (however doesnot look most likley scenario).

3. We donot know what the problem will be. Most likley however there will be a problem I think is the consensus thinking. Anyway we cannot afford to have a huge problem. To fix it would likley take decades and the economy woul;d tank during that period. With all consequences thereof.

4. Solutions. There are at this point no 100% guaranteed solutions. Not even if we would be able to to indicate exactly what the problem would be. Most solutions are new technology that might work or might not work and might be ready when we need it or might not. A lot of uncertainties.

5. Timing we donot know if and when a problem will arise. Likely the implementation of new technology would take decades, but again we donot know how long. And very likley as well some stuff will have to be improved first both technically as pricewise before it becomes even a realistic option for a solution. Which will take even more time.

6. Therefor we need options. Certain options like nukes (we know that it works, but donot like the disadvantages). But also new ones, that might have less disadvantages. And in more than one level. primary carrier of energy (say oil) but also in the way we actually use it (say as oil or as electricity).

7. In that respect biofuels simply looks like a worthwhile option to explore. And you can most likley only do that properly with larger scale pilots. Which as seen the costs involved need subsidising. As otherwise they donot work.

8. On prices.
Options long term ones are highly valuable things. So in that respect I donot have a problem with a substantial investment in it.

9. On prices of the alternative product.
This is new technology. It will have to be improved to make it work and likely can be improved.

10. Is this (or any other alternative source) the white knight.
Imho there will most likely be no white knights. It will have negatives. Like taking away farmland and rising prices in the agricultural sector. Which might generate more supply, but also make food more expensive. And the poor well they probably have a cake in the fridge they can eat as long as we can drive our SUV.
Anyway it is very unlikely that the population of say the US will let itself be kept hostage by countries that are so badly managed that they cannot feed their own population (at affordable prices) and cnnot keep their populationgrowth under control as well). Put before the choice the answer will be simply: 'let them eat cake'.

11. Seen from this angle effectively reducing energy spending can also be seen as an alternative.

12. Use of resources. Looks effectively pretty poor imho. No or hardly any creativity and political decisionmaking looks mainly driven by the interests of the political sponsors and left wing hobbies.
December 31, 2012 | Unregistered CommenterRik

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