Will the Department of Defense Help Open the Way to Next Generation Biofuels?

19 january 2013

WASHINGTON, D.C. — The budget line item for alternative fuels development is a drop in the bucket in terms of overall military spending, but it could be transformative for reducing the military’s vulnerability to rising global petroleum prices and supply disruptions. It could also be game changing for fulfilling the nation’s long-term commitment to developing competitively priced, domestically produced, more sustainable, renewable advanced biofuels. Yet getting this Congress to fund this Defense Department initiative is proving to be an uphill battle.

When the Senate returns in September, one of its top priorities on the crowded agenda will be to pass the annual defense authorization bill. The Senate Armed Services Committee completed its work on the bill, (The National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013, S. 3254), on May 24. In their final mark-up, two amendments that would strictly limit the Defense Department’s (DOD) role in developing commercial scale production of next generation biofuels and purchasing these fuels for use were narrowly approved, by roll call votes of 13-12.

The House version of the bill (H.R. 4310) contains similar restrictions, as does the House version of the FY2013 defense appropriations bill (H.R. 5856). However, on August 2, the Senate Appropriations Committee approved funding for the DOD’s alternative fuels development in its amendment to the House Defense Appropriations bill under the existing authority of the National Defense Production Act of 1950.

According to a Reuters news story July 18, a group of senators plans to block passage of the defense authorization bill if these provisions remain in the bill. Senators Jeanne Shaheen (D-NH) and Susan Collins (R-ME) wrote an op-ed in the July 15 issue of Politico in support of the DOD biofuels initiative.

Since the Bush Administration and continuing in the Obama Administration, the DOD has been exploring ways that energy efficiency improvements and the use of renewable energy technologies could help improve its operational capabilities and reduce its vulnerabilities in times of conflict. Its dependence on petroleum, in particular, is a critical vulnerability, as detailed in the recent DOD report Energy Investments for Military Operations: for Fiscal Year 2013.

The DOD is the largest single consumer of liquid fuels in the United States, accounting for almost two percent of U.S. petroleum demand. Every $1 per barrel increase in the cost of petroleum costs the Navy, alone, an additional $30 million per year.

In August 2011, the Obama administration announced an interagency initiative between the DOD and the departments of Energy and Agriculture to accelerate the development and production of advanced biofuels at a commercial scale so as to replace a significant portion of its aviation, maritime, and vehicle fuel with biofuels. According to the DOD Operational Energy Strategy: Implementation Plan (March 2012), the initiative includes a “close partnership with the private sector, [to] help catalyze a competitive advanced biofuels industry compatible with our military infrastructure. Each agency plans to provide $170 million, for a total of $510 million, over the next 3 years to support this initiative, utilizing DPA authorities and the Department of Agriculture’s Commodity Credit Corporation.”

According to the Implementation Plan: “The Departments of Air Force and Navy have identified goals for the use of alternative fuels. The Air Force is currently working to certify a 50/50 blend of JP-8 and alternative fuel for use in its aircraft and plans to be ready to cost-competitively acquire 50 percent of its domestic aviation fuel requirement, or roughly 387 million gallons of JP-8 per year, via an alternative fuel source by 2016. The Navy plans to purchase 200 thousand gallons of a 50/50 JP-5 and 700 thousand gallons of a 50/50 F-76 to sail a “Green Strike Group” domestically in 2012. This is a step toward the demonstration of a “Great Green Fleet” using 50/50 blends in 2016, which will require 3 million gallons of biofuels. The 2020 goal is to use alternative sources for half of all energy consumption afloat, which will require 300 million gallons of biofuels. The Military Departments and DLA-Energy also are partnering with organizations such as the Commercial Aviation Alternative Fuels Initiative, Air Transport Association, and American Society for Testing and Materials International to promote the development, certification, commercialization, and marketing of alternative fuels.”

In July 2012, the Navy, with its “Great Green Fleet,” successfully demonstrated the use of advanced biofuels to power its aircraft and ships in the Rim of the Pacific Exercise (RIMPAC), the largest maritime exercise in the world.

If this interagency initiative is successful in accelerating the development of a number of commercial scale, advanced, next generation biorefineries – in different regions of the country, using different types of biomass feedstocks and energy conversion technologies – this project could open the way for significant additional private investment in commercial scale biorefineries. As many as 500 new biorefineries, using many different types of biomass feedstocks (anything except corn starch), will need to be built by 2022 in order to fulfill the goals set by Congress in the 2007 Renewable Fuel Standard.