Navy Takes Flak for $15 / Gallon Biofuel Purchase Totalling $12M
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:
- Navy’s Big Biofuel Bet: 450,000 Gallons at 4 Times the Price of Oil
- Navy Buys Fuel at $15 per Gallon: They Should Read IER’s New Report