Navy Gives Another Push for Biofuels

On 16 August 2011, the US President Obama announced that the Departments of Agriculture, Energy and Navy will invest up to $510 million during the next three years in partnership with the private sector to scale up the industry for next-generation biofuels by producing advanced drop-in aviation and marine biofuels to power military and commercial transportation. Back in June 2011, the secretaries of the three Departments mentioned above had signed a memorandum of understanding for that.

President Obama and the Department secretaries proclaimed once again that biofuels are an important part of reducing America’s dependence on foreign oil and it will pave the way to energy independence. As usual, no mention about the costs to tax payers due to generous subsidies.

Nevertheless, again as usual, Navy Secretary Ray Mabus reiterated his claim that “America’s long-term national security depends upon a commercially viable domestic biofuels market that will benefit taxpayers while simultaneously giving Sailors and Marines tactical and strategic advantages....Today’s announcement not only leverages our home grown fuel sources to support our national security, but it also helps advance the biofuels market, which ultimately brings down the cost of biofuels for everyone.” He is even quoted as saying that "I can think of nothing more vital to national security than to diversify our forms of energy".  However, he never says when the costs will get down. The US government points out clearly that it will continue to use the weight of the military to commercialize (drop-in) biofuels.

The plan is to build commercial-scale pioneer biofuel refineries in different locations for a diverse feedstock supply. To participate in the program, commercial companies will have to invest at least as much as the government (at least a one to one match). Funding for the program will be split equally among the three agencies. The Navy will act as a customer for production and define technical requirements for aircraft and vessels.

In any case, this announcement will make the biofuel industry very happy. The remarks made by Michael McAdams, president of the Advanced Biofuels Association (ABFA) make this clear: “No waiting for the day when costly changes are made on car assembly lines or gas stations… The Administration's investment in commercializing advanced biofuels is a matter of national security. … our nation's defense is at the mercy of the market just as much as we are when we pull up to the gas station."

Already, in June 2011,  Secretary of Energy Steven Chu had announced up to $36 million to fund six small-scale projects in California, Michigan, North Carolina, Texas, and Wisconsin, that will advance the technology improvements and process integration needed to produce drop-in advanced biofuels and other valuable bio-based chemicals. Also, in December 2009, Secretary Chu and Agriculture Secretary Tom Vilsack had announced the selection of 19 integrated biorefinery projects to receive up to $564 million from the American Recovery and Reinvestment Act to accelerate the construction and operation of pilot, demonstration, and commercial scale facilities.

While this biofuel hype continues in Washington DC UK company Altona Energy believes it can supply vehicle ready diesel at $53 a barrel ($1.25 per gallon), with a coal to liquids plant, incorporating carbon capture for underground carbon storage, with financial support from China ( Diesel from CTL with carbon capture at a cost of $53 / barrel). And yet, Coal to Liquids are no more mentioned in the US, a country rich in coal.