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Published on December 27th, 2011 | by Clayton


Navy Takes Flak for $15 / Gallon Biofuel Purchase Totalling $12M

December 27th, 2011 by  

navy biofuels

Critics claim that $15 / gallon (the calculated pump price) is too much. The Navy says this will accelerate the production of homegrown fuel and contribute to Navy’s goal of 50% renewable fuel by 2020.

The 450,000 gallons of agal and animal fat oil-based fuel constitutes the largest single purchase of biofuel in US history. While the fuel is an advanced, drop-in biofuel (it requires no engine modification), it will first be blended 50/50 with marine diesel or aviation gas and then used in a demonstration aircraft-carrier group dubbed “The Green Strike Group.”

In preparation, the Navy says it has already tested the fuel in F/A-18s and all six of the Blue Angels, along with the V-22 Osprey, the RCB-X (riverine command boat), training patrol crafts and other vessels.

Two companies will deliver the order, despite producing biofuel from two wildly different sources. Dynamic Fuels (half-owned by Tyson Foods) produces fuel from waste fat and greases, while California-based Solazyme is an algae-based biofuel company. Before this contract, Solazyme had already delivered about 150,000 gallons of their fuel to the Navy.

The demonstration comes as a response to President Obama’s “we can’t wait” energy security goals, outlined in the March 2011 “Blueprint for a Secure Energy Future,” which prompted the Secretaries of Agriculture, Energy, and Navy to set aside up to $510M for renewable fuels over the next three years. This money will be invested in partnerships with the private sector to produce drop-in biofuels for military and commercial use.

Critics aren’t happy, claiming that a back-of-the-napkin $15 / gallon is too much when compared to the standard aviation-fuel price of $3.97 per gallon. It seems a bit unfair to compare the two, considering that aviation-fuel has about a 72-year head start. The simple fact that algae biofuel is being successfully tested in advanced tactical aircraft is incredible, let alone that it’s being done at any kind of scale.

Will biofuels always be more expensive than fossil fuels? Probably! But since when did the US military care about paying a little extra? The Navy’s major point here about acquiring 50% of their fuel from renewable, home-grown sources is the strategic consideration of reliable access to fuel. If the US loses a large percentage of primary fuel imports, it sure would be nice to have access to something else, cost be damned.

For some differing opinions on this, see the following:

Primary Source / Image Credit: US Navy

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About the Author

In a past life, Clayton was a professional blogger and editor of Gas 2.0, Important Media’s blog covering the future of sustainable transportation. He was also the Managing Editor for GO Media, the predecessor to Important Media.

  • Cliff Claven

    The price for the biofuel itself in this contract is actually $26 per gallon ($12M for 450K gal) and is more than 8 times the current rate for conventional JP-8 jet fuel and F-76 diesel oil (both less than $3 a gallon to the military in bulk). Even so, this price is a huge deception. DOE is separately subsidizing Solazyme for the algae fuel to the tune of $21 Million. USDA is also pumping in money via subsidies and loan guarantees. To get an idea of the real price of biofuels, Honeywell UOP just won a DOE contract for $1.1M to produce 100 gallons of fuel-that’s $11,000 a gallon. This is how the Administration and the Navy are spending our tax dollars while carrying a $15 Trillion debt and cutting defense. America’s fanciful mandatory ethanol policies have driven up the world-wide price of food 250% and resulted in the United States actually IMPORTING biofuel to meet federal mandates. How insane to spread starvation in other countries by enticing their farmers to fuel crop production instead of food production (e.g., Brazil), and to trade U.S dependence on cheap imported petroleum for a dependence upon expensive imported ethanol and biodiesel. The Navy paid $430 a gallon for Solazyme algae diesel oil for its recent ship stunts and $149 a gallon for algae kerosene for its recent airplane stunts– fuels that normally cost the military less than $3 a gallon in bulk. I say “stunts” because that is what RAND said in its Jan 2011 study ( that said the US Military is wasting vast sums of money duplicating meaningless demonstrations that have already been done by industry for 55 different biofuel blends. The issue is not making the fuel, it’s making it economically. Honeywell UOP was just awarded a DOE contract for $1.1M to produce a mere 100 gallons of fuel sometime in 2012–that is $11,000 a gallon. North America is already littered with failed ethanol biofuel enterprises that never delivered and closed up as soon as the subsidies dried up.

    BTW, where is the real “green” crowd? As rain forests are getting chopped down to become corn or oil palm plantations and natural prairies are being turned into farm land, I wonder where Sierra Club is? All the nitrogen fertilizer used for increased cultivation (which comes from natural gas BTW), is accelerating eutrophication (creation of dead zones) in our lakes and oceans. The reputable lifecycle research done by unbiased institutions (e.g., Cornell and UVA) show it actually takes more fossil fuel energy to make a liter of ethanol or biodiesel than that liter provides back to the system. Biofuels can’t beat the laws of thermodynamics, let alone economics.

  • Nixon

    This story is a great example of the mind-numbing short-sightedness of the typical right-wing anti-green hate machine.

    The military won’t give a damn if it costs $15/gallon to run their $50,000,000 dollar warplane, if there is another 1970’s style oil embargo that endangers our oil supply. If World War III blows up in the Middle East, the cost of oil WILL skyrocket. The supply of oil to the world WILL be drastically reduced. With this plan to test and adopt biofuels NOW, the military will still be prepared to go out and kick just as much @ss as they need to, without having to worry at all that our enemies could manipulate the oil market to damage our military strength due to our current 100% dependence upon petroleum based fuels. This is a war plan for military victory in case of massive Middle East warfare. Only the most short-sighted, small-minded thinkers would turn this story into yet another anti-green rant. I can’t wait for them to start bringing up Solyndra in the middle of this topic, just like has become their habit when bashing anything green.

    Some may say that I’m being way too hard on the anti-green righties, and that they are just trying to be responsible spenders. Where were all these responsible spenders when it came out that we were spending $400 dollars/gallon to get gasoline onto the ground in Afghanistan? They certainly weren’t complaining then. It’s only when they can bash something green that they suddenly become so fiscally tied up in knots.

  • DaveD


    And consider that the cost of the Bio-fuel would only raise the cost of that $400 (delivered to the ground if Afghanistan) by about 2.5%! That’ is a small price to pay to have a secure source of fuel and that price will clearly come down when they are producing tens of millions of gallons instead of half a million.

    And if they really want to drive the overall cost of fuel down, a 10% increase in efficiency would drop that effective $400 cost down to $360 which overshadows any difference in price which is more likely to be close to even as bio-fuels come down and regular oil goes up. And this WILL happen.

    The military is not stupid and they can do math so they realize this. For that reason they have already spec’d out new fuel efficiency in next generation EVERYTHING. The replacement for the Hummer is one of those: “The Army is looking for a few more miles to the gallon, and a new troop carrier that might replace the famed gas-hungry Humvee could get as much as a 70% improvement.” That 70% would mean a hell of a lot more to the troops who have to deliver it and the tax payers who have to pay for it, than the tiny difference in price of the fuel itself.

    • Nixon

      DaveD — you nailed the math exactly how the real military leaders are leading the military. For all the “listen to the military leaders” comments you hear from the right, you would think that they would actually take their own advice for once and listen to why the military leaders have chosen to take the military green.

  • Nixon

    Just in case folks think I’m just some paranoid blabbing about another war in the Middle East — here is the latest news from Iran while we were busy buying Christmas presents….

    “Three days into their 10-day naval exercise, Iran announced it will shut the Strait of Hormuz and close off nearly one-third of all tanker-carried oil if sanctions against its own oil exports are enforced. Al-Arabiya News reports Iranian Vice President Ahi Rah imi said “If sanctions are adopted against Iranian oil, not a drop of oil will pass through the Strait of Hormuz.”

    On December 1, the U.S. Senate sanctioned the Central Bank of Iran, a first step in limiting crude export. December 14 legislation by the U.S. House of Representatives voted 410-11 to increase sanctions on Iran”

    The US military should be SPEEDING UP their biofuel adoption program if anything. They need to have it into place BEFORE Iran starts sinking oil tankers in the Strait of Hormuz using the same Silkworm missiles that disabled an israeli heavily armored and defended warship during the Lebanon War II.

    Instead, we have a bunch of knee-jerk idiots who are so blinded by hate for Obama, Democrats, and anything they represent, that they will speak out against the interests of the US military, and the interests of US security just to take a jab at the Obama administration. How embarrassing.

  • $12 million?? Really? What fraction of a smart bomb is that? It’s not the cost, it is the value that matters.

    This is one of the best things the DOD can do with its purchasing power – create markets for biofuels that will diminish the strategic importance of oil. While providing logistical alternatives for addressing crises in the future, the military is also helping reduce the demand for a resource that is the outcome determinant and the cause of most of the wars of the past century. With the global rise of population, the heightened expectations of the growing middle class in Asia, and the skyrocketing demand for energy, oil will be the cause of resource wars in the future unless we do something now. Read my comments on “Turn Oil into Salt” at .

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  • The military bought biofuels last year as well. Because of volume purchasing and market development, the cost per barrel this year is now half what it was just last year! Biofuels are getting cleaner, more plentiful and cheaper while oil and oil distillates are getting dirtier (oils spills, heavier oil refining, tar sands), harder to access (exploratory wells, environmental policies, nationalization of corporations, embargoes), and more expensive (diplomatic coercion, reserve manipulation, balance of trade).

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