The latest move is a joint effort by the departments of Energy and Agriculture and the U.S. Navy, who are putting up a total of $30 million to match private investments in commercial-scale advanced drop-in biofuels – biofuels that can work without modifying the military’s ships or planes.
In the funding opportunity announcement, the administration said it was aiming to establish “one or more complete domestic value chains capable of producing drop-in replacement biofuels. This includes feedstock production and logistics, conversion facility (Integrated Biorefineries), and fuel blending, transportation and logistics.”
The target is for “at least 10 million gallons per year” of biofuel production capacity.
That’s about 10 million gallons more per year than many in Congress – Republicans in particular – would like to see.
In early May, you might recall, the Republican-controlled Armed Services Committee included a provision in the 2013 Defense Department budget that would ban the department from buying alternative fuels that are more expensive than conventional fuels. That’s just a clever way of cutting off the biofuel spigot, since the military is paying a premium for its biofuels, some derived from algae oil and animal fats, to help build a biofuels supply chain that’s in its infant stages.
Surprisingly, the Democratic-controlled Senate Armed Service Committee then went along with this House provision.
At a hearing last month, Defense Secretary Leon Panetta told the House committee that the biofuels ban “could deprive commanders of the flexibility they need to meet tactical and operational needs, and make us more exposed to potential supply disruptions and future price volatility of petroleum products.”
But critics have pointed with outrage to the Navy’s $12 million purchase, announced late last year, of 450,000 gallons of biofuels from two companies: Solazyme, the South San Francisco-based startup that ferments algae to produce oil that can be refined into fuel; and Louisiana-based Dynamic Fuels, a Tyson Foods-Syntroleum joint venture that makes its fuel from used cooking oil and non-food-grade animal fats. The plan is to use the fuels this summer in 50-50 blends with standard diesel and aviation fuel in ships and aircraft taking part in what the Navy calls the world’s largest international maritime war games, the Rim of the Pacific exercises off Hawaii.
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