Issue Date: September 17, 2012
When a half-dozen U.S. Navy ships and associated aircraft gathered off the coast of Hawaii on July 18, they did more than practice military maneuvers. The Great Green Fleet demonstration was the first example of the military successfully using biofuels on a large scale rather than for one-off experiments. The fleet sailed on a blend of traditional petroleum fuel and biofuels from algae and cooking oils.
“We were able to witness, in an operational setting, the absolutely seamless integration of advanced biofuels and energy-efficient technologies into some of the Navy’s most sophisticated air and sea platforms,” Ray Mabus, secretary of the Navy, said at a press conference afterward. “It marked a serious step to take us on the road toward energy security and energy independence.”
But the demonstration wasn’t met with such enthusiasm by Republicans in Congress. Instead, it fueled a growing backlash against the military’s spending on all types of biofuels.
Republicans claim that the Department of Defense (DOD) is wasting money on biofuels, which currently cost many times more than traditional petroleum fuels. They say the military’s use of biofuels is driven by the Obama Administration’s environmental policies rather than defense needs.
Defense leaders counter that investments in biofuels projects are aimed at helping solve an important military problem: volatile petroleum fuel prices. A domestic biofuels market could make fuel prices more predictable, thereby making them part of a stable, local fuel supply. This predictability is not available with the current petroleum markets.
House Republicans have put legislation behind their opposition in the form of an amendment to a DOD authorization bill. The amendment would prevent the military from spending money on biofuels until their cost is on par with that of petroleum fuels. In May, the House passed the amendment as part of the 2013 National Defense Authorization Act, which sets target spending levels for congressional appropriators.
“The Defense Department should not be in the business of driving fuel markets and fuel innovation,” said Rep. K. Michael Conaway (R-Texas), who sponsored the House amendment, during a May hearing on the defense bill. “This is an area where we don’t need to spend the money to prove anything.”
In the Senate, the DOD authorization bill has cleared the Armed Services Committee with a different amendment, which is cosponsored by Sen. James M. Inhofe (R-Okla.). The amendment would prohibit DOD from funding biofuels refinery construction, but it doesn’t prohibit biofuels testing, according to a spokeswoman for Inhofe. The full Senate has not acted on the bill.
The Conaway amendment makes price the only factor in determining whether the military could use alternative fuels. DOD has expressed concern that such a narrow prescription could prevent the military from doing research or developing technologies in areas that are not controversial—including hydrogen fuels or other biofuels that are already in use such as ethanol—even if they have a military benefit.
The military has been researching alternative fuels since 2003. According to a DOD fact sheet, alternative energy research represents less than 4% of DOD’s proposed $9 billion budget for operational energy initiatives from 2013 to 2017. The vast majority of energy funding goes to increasing energy efficiency through improving engines and electricity generation, designing better batteries, or creating solar panels that could be used in the field.
The main driver behind the military’s desire to explore biofuels is the rapidly rising energy costs. DOD estimates that for every 25-cent rise in the cost of a gallon of fuel, the department spends an extra $1 billion for fuel.
The unpredictable prices are a major problem for the Air Force, says Kevin T. Geiss, the deputy assistant secretary who oversees Air Force energy use. The military branch spends $10 billion on energy each year—$9 billion for aviation fuel alone—so changes in prices quickly impact their bottom line.
In 2011, for example, the Air Force had to make up a $1 billion budget shortfall because fuel prices changed so drastically between 2009, when the budget planning took place, and when the fiscal year actually began. It had planned in 2009 to pay $2.37 per gal in 2011, but when the year started, the price of fuel was $3.02 per gal. During the year, that price climbed as high as $3.95 per gal.
“The Air Force is having to make very difficult choices year after year to handle the fuel bill,” Geiss explains. “We are having to pull money out of programs that are actually a priority for the Air Force just to pay the bill because we cannot foresee what the price is going to be.”
The Air Force is getting some fuel savings by changing how they fly their planes or trying to make fewer trips. But in the long term, that isn’t going to be enough, Geiss says. The Air Force has reduced its consumption of energy for the past decade, but the amount they are paying for fuel is still rising.
Most of the Air Force’s biofuels research to date has been aimed at being ready to purchase biofuels once they are cost-competitive. For example, it has tested whether drop-in biofuels—those that can be directly substituted for or blended with traditional petroleum fuel—could safely be used with existing jet engines.
But critics are asking why DOD doesn’t wait until the fuel price is more competitive. To those questions, Geiss responds, “As the alternative fuel industry develops, we want to be there on the ground floor. We want to help identify what the specifications are for the fuel.” With the biofuels testing being done now, the Air Force could commit to buying biofuels immediately once the price is competitive.
It’s that commitment that has biofuels producers worried about the House action. As the single largest consumer of petroleum fuels worldwide, the military could be a large market for biofuels. Changes to the government policy in this area make it difficult for biofuels producers to plan for the future, estimate prices, or get funding to build production-scale plants, which is necessary to bring prices down, according to the Biotechnology Industry Organization, a trade group.
“Stable policy is good; shifting policy is bad. It scares the industry,” says Pat R. Gruber, chief executive officer of Gevo, a biofuels production company that has done work on jet fuels.
Republicans aren’t the only ones who say the military is wasting their money doing research on biofuels. A study of alternatives to petroleum fuels, including those made from coal, by the Rand Corporation, a global policy think tank, says alternative fuels are not worth the military investment.
The military’s alternative fuels research will have benefits, but they will help the larger economy rather than the military specifically. Instead, DOD would be better served by spending more money to improve the efficiency of its current fleet, the Rand report states.
“Military fuel demand is only a small fraction of civilian demand, and civilian demand is what drives competition, innovation, and production,” says James T. Bartis, lead author of the Rand study. “Testing and certification efforts by the military services are far outpacing civilian demand.”
For now, though, the military will continue to push forward with biofuels. DOD has a legislative mandate to use 20% renewable fuels by 2025, Geiss says. It is uncertain how this would mesh with Conaway’s amendment, if it becomes law.
And the Navy is hoping its Great Green Fleet exercise is just the first step toward the goal of deploying by 2016 a multivessel carrier strike group fueled by alternative sources of power, including biofuels and nuclear energy.
“We are pursuing alternative energy because our reliance on foreign oil is a significant and well-recognized military vulnerability, and we are trying to address that vulnerability,” Mabus said.
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