Tuesday, April 02, 2013

Biofuels Waste Encouraged by Angels

In my previous post and in many others I have been saying that it is not the US Defense Department’s job to push an uncompetitive industry with tax payers’ money, especially at a time of fiscal cliff.

On 14 March 2013, U.S. Senator Pat Toomey (Pennsylvania Republican) filed two amendments that aim to slash biofuel spending from H.R. 933, a military appropriations bill (Department of Defense, Military Construction and Veterans Affairs, and Full-Year Continuing Appropriations Act, 2013).  

One amendment offered by Sen. Toomey would transfer $60 million in funding currently allocated for the DOD biofuel program under the heading for advanced drop-in biofuel production, and reassign it to support military operation and maintenance expenses of the DOD in connection with programs, projects and activities. The second amendment would reduce the amount of funding allocated to the military’s alternative energy research by a total of $114 million. The funding would also be reallocated for operation and maintenance expenses.

He proposed these amendments after learning that the Tobyhanna Army Depot plans to lay off 418 civilian contract employees. “it makes little sense to waste money on inefficient, overpriced energy sources when we could use those same funds to help support critical maintenance services for the warfighter,” he said in the statement on his website. (Sen. Toomey Offers Amendment Supporting Military Installations In Pennsylvania And Nationwide).
But the Senate defeated his amendment that would have transferred money from the Navy’s biofuels program to increase the DOD’s operations and maintenance funding. On March 20, 2013
Sen. Toomey Disappointed that his amendment failed. He said that " it's very disappointing that a number of my colleagues would rather spend taxpayer dollars on more wasteful biofuel subsidies than support essential maintenance operations for our military."  
President of advanced biofuels company Novozymes, naturally, praised the Senate for continuing its support of the Navy’s advanced biofuels program. “Every day we import oil, we’re putting our troops, families and country at needless risk. We can reduce that risk with a secure energy supply, including renewable fuels.”
Similarly, Secretary of the Navy Ray Mabus and his congressional advocates have long argued that conventional fuels make the military vulnerable to oil market price shocks, which can force the DOD to take money from training and spend it on fuel.
I guess people who use these kinds of arguments do not follow at all what is happening in the US oil market. Monthly crude oil production in the United States is expected to exceed the amount of U.S. crude oil imports later this year for the first time since February 1995. The gap between monthly U.S. crude oil production and imports is projected to be almost 2 million barrels per by the end of next year, according to Energy Information Administration.
By the way, defenders of DOD’s biofuels program should with nonsense argument that the biofuel spending is only a small portion of the DOD Budget. If you want something look small, then use ratios, like the share of the national security budget in the US GDP. Right only around 5%, and yet we are talking about over $600 billion, or a trillion dollars, which is as much as the total net oil export revenues of OPEC members.
So, focusing on the angel side of biofuels is not a right thing to do. A more cautious view is necessary, as does the U S Air Force.
The new Air Force Energy Strategic Plan states that USAF is certifying its aircraft to fly on different alternative fuel blends, including biofuel blends to ensure that it “will be ready for whatever private industry is able to bring to market. “ This is a clever approach than the Navy. Be ready to what industry can bring, but don’t push the industry to deliver something expensive.
One of the goals of USAF is to increase use of alternative aviation fuels. The objective is to increase use of cost-competitive drop-in alternative aviation fuel blends for non-contingency operations to 50% of total consumption by 2025. Another clever approach, “cost-competitive.” Even for the ground vehicles it states the objective very clear: ” Use alternative fuels 100% of the time when alternative fuels are available and cost effective.
Lawrence P. Farrell Jr of the National Defense Industry Association says that “Washington cannot control its finances and balance its budget (…) trillion-dollar deficits can’t continue indefinitely. It is also a fact that the nation has spent too much, promised too much and borrowed too much." Although he is talking about the US, it is true for the Defense Department’s biofuels program so far.


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