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U.S. Oil And Gas Is Changing To Survive

U.S. Oil And Gas Is Changing To Survive

Spending by E&P operators has…

A Serious Warning From The World’s No.1 Copper Nation

A Serious Warning From The World’s No.1 Copper Nation

Tougher environmental regulation in Chile…

$26 A Gallon for Biofuel - Is the Navy Paying too Much to be Green?

At the current RIMPAC, the world’s largest international naval exercise, the US are testing the use of biofuel as part of their plan to ‘green the fleet’ by 2016. The USNS Henry J. Kaiser is carrying 900,000 gallons of biofuel/petroleum mix; 700,000 in the form of hydro-treated renewable diesel fuel, and 200,000 gallons of hydro-treated renewable aviation fuel.

The biofuel has been developed from waste cooking oil and algae oil, and cost a staggering $26 a gallon. Republicans in Washington are not happy.

The Navy released a statement declaring that “investments in biofuel will produce a competitively priced — and domestically produced — alternative to conventional fuel. Such investments help the Navy and the nation become less dependent on foreign oil and thus less subject to volatility in oil prices that directly affect our readiness.” This current trial at RIMPAC will be used to “test, evaluate and demonstrate the cross-platform utility and functionality of advanced biofuels in an operational setting.”

Senator John McCain said that he doesn’t “believe it's the job of the Navy to be involved in building ... new technologies,” because he doesn’t think that “we can afford it.”

Ray Mabus, the Navy Secretary, disagrees, suggesting that the Navy has the purchasing power to increase biofuel production, increasing the research and development which will then lead to lower prices.

The Obama administration has also ignored Republican critics by announcing that the Navy, Department of Agriculture, and Department of Energy have invested $62 million in new biofuel projects.

By. Charles Kennedy of Oilprice.com

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  • alf on July 12 2012 said:
    @cliff The whole point is to invest in the technology and the price comes down. Again, the whole point is to invest in the technology and the price comes down. You even prove this in your propaganda. Navy paid $427/gallon in 2009 and recently they paid $26/gallon. With that progression, they will pay $1.50/gallon in 2015, and that will save the Navy and our country a hundred times more than the investment to make the price come down. Again, the whole point is to invest in the technology and the price comes down. Now go post your propaganda all over the internet.
  • Anonymous on July 08 2012 said:
    Dear Cliff & Charles:

    There are currently 1,865 biofuel companies driving the cost down. Not all of these are going to survive, but with 1,865 companies working to lower the cost of biofuel the renewable fuel price will be competitive with fossil fuel as finite fossil fuel prices continue to increase towards 2020-2030 timeframe. Thus, the DOD, DOE and USDA's investment is a long-term play not a short-term. If the DOD were to only look at short-term investments - would the Navy have ever invested in nuclear submarines or aircraft carriers? Probably not... think long term here not short term.

    If we always made short-term decisions - why would any of us ever go to trade school, vo-tech, or university after high school when we could make quick $ flipping burgers?

    Source: http://www.consumerenergyreport.com/2009/05/03/we-do-not-have-a-simple-solution/
  • Charles Maxwell, CDR, USN (Ret) on July 07 2012 said:
    Having spent the greater part of my adult life serving a grateful nation in the US Navy I can say with absolute certainty that our navy has enough on its plate without strapping on another non essential mission such as this is. The Navy's operational budget is always under attack and when end of quarter/year funds are tight, guess where the planners first look for cut backs? If you guessed Fuel Budgets, go to the Foc'sle of the Destroyer! Given the higher costs of the 'new' bio-fuels, where ever will the cut backs come from? Maybe ammo! Maybe personnel! Maybe pick-a-budget-target! The Navy, or military in general, is no place to experiment in the midst of two ongoing wars unless, of course, the experiment has to do with better weapons systems and force protection measures of which, bio-fuel is neither!
  • Cliff Claven on July 06 2012 said:
    How is borrowing money from China to finance deficit spending on biofuels at 5 to 50 times the price of fossil fuels we could be producing right off our own coasts if not prohibited by our government improving our National security? To add a data point, the U.S. Navy paid $4,454.55 a gallon ($187,000 a barrel) in February 2012 to Albemarle Corp. to convert biobutanol into jet fuel, and this doesn't include the money the Navy paid Cobalt to make the biobutanol in the first place. This eclipses the Navy's previous record of paying Solazyme $427.53 a gallon ($18,000 a barrel) for algae diesel oil in 2009. Overall, the U.S. military has purchased 1.3 million gallons of biofuel since 2007 at an average price of $48 per gallon. These biofuels require more energy to create (fertilizer, pesticides, herbicides, farm machinery fuel, fermentation, distillation, hydrotreatment) than they yield in their final product. That energy deficit is input by fossil fuels, and is why making biofuels actually accelerates our use of fossil fuels and increases our dependence upon foreign oil, and why the price of biofuels is and will continue to be as volatile as the price of oil. A host of more thorough lifecycle studies produced since 2008 report that biofuels are more damaging to the environment and cause more greenhouse gases to be released than the direct use of fossil fuels. Meanwhile, the military prices of jet fuel and diesel have never risen above $4.00/gal. Seeing some Congressman take a stand for science and sense instead of politics is refreshing.

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