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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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U.S. Military Biofuels Survives Republican Congressional Euthanasia Attempt

What a difference a month makes.

During the heated U.S. presidential debate last month, Republicans lined up the U.S. military’s interest in renewable fuels in their gunsights, with both House and Senate Republicans introducing legislation to prohibit the Pentagon from buying any fuels with a price tag greater than those generated from traditional fossil fuels.

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 of Oilprice.com

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