The federal government is using the weight of the military to counter years of disappointment with biofuels and commercialize drop-in replacements for diesel and jet fuel.
Three government agencies--the Departments of the Navy, Agriculture, and Energy--today announced a memorandum of understanding to spend $510 million over three years to scale up the industry for advanced biofuels.
The agencies will put out a request for proposals to build commercial-scale biorefineries, called "pioneer plants," able to make diesel and jet fuel from non-food sources at prices competitive with fossil fuels. The biorefineries will aim to be built in different locations for a diverse feedstock supply and to encourage economic activity in rural areas.
To participate, commercial companies will have to invest at least as much as the government puts in, said Navy Secretary Ray Mabus during a media call with Agriculture Secretary Tom Vilsack and Energy Secretary Steven Chu today. Funding for the program will be split equally among the three agencies and come from existing sources, they said.
"I can think of nothing more vital to national security than to diversify our forms of energy," Mabus said.
The Navy will act as a customer for production from these advanced biofuel refineries and define technical requirements for aircraft and boats. Mabus set an ambitious target of getting at least half of its energy from non-fossil fuel sources by 2020.
Transporting fuel creates security vulnerabilities in areas of combat and the volatility of oil prices hurts the military, which consumes about 80 percent of all energy from the federal government. When the price of oil goes up one dollar, it costs the Navy an additional $30 million in fuel costs. The Navy has already successfully tested biofuels or a blend of biofuel and petroleum in aircraft, he added.
The U.S. biofuels industry is now dominated by corn ethanol, which has come under fire for the subsidies the industry receives and the environmental impact from corn ethanol.
The feedstocks for producing drop-in replacements for jet fuel and diesel can be sugar or cellulosic feedstocks, such as wood chips or grasses, said Secretary Chu. The end goal is to make jet fuel and diesel directly from cellulosic sources, he said. The Navy has also tested fuels made from algae, Mabus noted.
Even with research and development and funding for pilot plants, though, cellulosic ethanol has not met industry targets or been able to meet a cellulosic fuel mandate set in 2007. Chu said there has been continued technical progress and that large-scale plants serving the Navy will help the industry get established.
"We have been making rapid progress in the next generation of biofuels...which has put us on the cusp of a biofuels revolution. The announcement we are making will keep the momentum going," Chu said.