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5/21/2012

Biofuels Industry Has Fight on Its Hands as Senators Take Up Budget Debate
By Eric Beidel

The biofuels industry could use some friends on Capitol Hill in the wake of a House bill that limits Defense Department investment in green energy.

As the debate shifts to the Democratic-controlled Senate, renewable energy advocates hope for better outcomes.
 
“We’re looking good in the Senate,” said Jaime Shimek, legislative assistant for Sen. Patty Murray, D-Wash., who has introduced legislation that would allow the Pentagon to enter into long-term contracts to purchase advanced biofuel.
 
But supporters are still reeling from the lack of support in the House, where two amendments to rein in the Pentagon’s pursuit of biofuels were passed last week. One would ban the Defense Department from buying alternative fuels that cost more than fossil fuels. The other would exempt the department from legislation that requires the government buy only alternative fuels that are less polluting than fossil fuels.
 
“We’ve got a fight on our hands,” said Casey Howard, an aide for Sen. Mark Udall, D-Colo., who sits on the Senate Armed Services Committee.
 
Howard and Shimek spoke to a May 18 biofuels roundtable organized by the Agriculture Department, Energy Department and Navy. The focus of the discussion was a joint-agency effort to invest more than $500 million over three years to establish plants that can produce aviation biofuels at commercial scale. But the event attracted a much larger audience than officials anticipated, and congressional aides were brought in at the last minute to give company executives updates on the raging political debate surrounding their industry.
 
More than 300 executives showed up to Agriculture Department headquarters, some with products in hand, ready to sell.
 
“I can grow mountains of this stuff,” said one man from California, holding up two vials of algae he said he can he turn into fuel for about $12 per gallon.
 
The comparatively high cost of biofuels is one of the main reasons proponents are leaning so heavily on the joint effort between the Agriculture Department, Energy Department and Navy. Further public and private investment can help spur the market, they say, while a drop in political support could send efforts back to square one.
 
Though backing for biofuels initiatives appears stronger in the Senate, the battle is far from over. Howard and Shimek pleaded with industry executives to wield their influence on Capitol Hill to ensure that critical investments are protected and amendments such as those introduced in the House are struck down.
 
Howard noted that some senators might support the House provisions and may even seek greater restrictions on biofuels. He and Shimek said that the political  opposition has falsely characterized the military’s pursuit of alternative fuels as having to do with climate change or pushing a “green” agenda. But if biofuels didn’t provide tangible operational benefits for troops, “frankly we wouldn’t be behind them,” Howard said.
 
Military leaders insist that their pursuit of alternative fuels has little to do with the environment and everything to do with the battlefield.
 
Air Force researchers are compiling the evidence to support that case.
 
Preliminary results from recent tests at Wright-Patterson Air Force Base in Ohio show that the use of alternative fuels could lead to a new generation of more powerful aircraft engines.
 
Researchers have found that when alternative fuel burns, it does so at a temperature about 135 degrees cooler than petroleum, said Omar Mendoza, an aerospace engineer and special adviser for technology in the Air Force’s energy program office.
 
“That means we can design engines with more capability, more speed and more range, not to mention that they will last maybe 10 times longer,” Mendoza said.

The Air Force has tasked engine manufacturers — Rolls Royce, General Electric, Pratt & Whitney and Honeywell — to study the issue and report back on what these lower temperatures will mean in terms of engine life, cost and maintenance. The companies also have been asked to provide information about the possibility of designing a next-generation engine that can take advantage of biofuels.
 
The Air Force also has determined that alternative fuels weigh less than standard jet fuel. The use of biofuels would reduce weight by about 7 percent in big tankers such as the KC-10, Mendoza said.
 
“All of those things will give us a strategic and tactical advantage in the air for air superiority,” Mendoza said. “That’s why we want alternative fuels.”
 
Ask Navy leaders why they are so interested in biofuels, and they will point to the service’s fuel bill for fiscal year 2012.
 
Because of petroleum cost increases, the Navy has to cough up about $1 billion more than it expected to pay. The extra money will come out of training, readiness and sustainment funds, said Tom Hicks, deputy assistant secretary of the Navy for energy.
 
“We will fly less, we will steam less, we will sustain our facilities less, we will push much-needed programs to the right,” Hicks said. “That’s unacceptable.”
 
A competitive alternative fuels market can offer the Navy an escape from volatile oil prices, Hicks said.
 
The Pentagon envisions a future where petroleum and alternative fuels compete head-to-head for contracts, said Jeanne Binder, the lead for alternative fuels and renewable energy at the Defense Logistics Agency. She also serves on a Pentagon task force that is looking at policy questions surrounding the purchase of alternative fuels.
 
In the future, the Defense Department won’t be able to always pay a premium, but it currently may have to in order to advance the effort, Binder said.
 
“Patience is key,” she said. “It’s not a Big Bang kind of thing.”
 
It’s all about investment, Howard said.
 
“Thirty years ago microchips were really expensive,” he said. “Now, I’ve probably got seven on me right now as we speak.”

Posted at 3:03 PM by Eric Beidel | Permalink | Email this Post | Comments (3)

Comments

Re: Biofuels Industry Has Fight on Its Hands as Senators Take Up Budget Debate

The Air Force Research Lab test results are a red herring.  It is possible to enhance any fuel by a century-old process called “hydrotreating” or "hydrogenation" which increases the hydrogen content.  This process is how liquid vegetable oil is turned into semi-solid lard.  Both biomass and fossil fuel feedstocks can be hydrogenated.  There are also other expensive refinery steps that can be done to improve both types of fuel including catalytic cracking and oxygenation.  These additional steps, if desired, add the same extra costs to both fossil and biofuels.  The reason hydrotreating is not generally done for fossil fuels is cost—it is not economically worth it.  Of course, cost is not a factor for biofuels when Congress and the White House are throwing money at them and forcing Department of Energy and Department of Defense leaders to play politics.  Hydrogenation increases the energy per unit mass, but decreases the energy per unit volume (e.g., and airplane could lift a bit more, but would travel a shorter distance).  It also thickens the fuel and changes its low temperature flow characteristics.  Also, the fact that this biofuel lacks aromatic compounds is actually viewed as a problem, not a blessing, by engineers because aromatics are essential for proper sealing of the o-rings and gaskets used in modern fuel systems.  There is no way to justify paying 1000% more a gallon for a boutique fuel, especially for a chimera  7% improvement in performance.  Bio-jet fuels currently cost more than $30 a gallon with no prospect of becoming competitive with fossil fuel because they require so much fossil fuel to make and their price indexes with oil prices.  The US military purchased bulk jet fuel for $2.31 a gallon in 2010. 
Cliff Claven at 5/22/2012 7:06 AM

Re: Biofuels Industry Has Fight on Its Hands as Senators Take Up Budget Debate

Cliff,

Some facts you need to consider:
1.  The economics of hydrotreating are positively affected by our newfound abudance of shale gas.
2.  Some biofuels have good aromatic content, and superior preformance to pertoleum derived fuel.
3.  Of course they cost more when produced at low volume on sub-scale equipment.  The DPA program is designed to promote accelerated scale of new technologies like these.
4.  In the end they will have to compete with oil on price and oil will set the market.  However, wouldn't you rather a portion of our fuel dollars go to US rural communities (where we get over 40% of our military personnel) than to OPEC?
Norm at 5/22/2012 12:45 PM

Re: Biofuels Industry Has Fight on Its Hands as Senators Take Up Budget Debate

A company called Origin Oil (OOIL) has a new separation system that removes oil from algae and has recently stated that blended fuels could be produce right now for $2.28 per gal.  Recent testing also showed that their system can be used on fracking oil/water with much less costs than current technology to get the oil out of the water.  Low cost, no chemicals, high rate of volume separation. 
hauge at 5/22/2012 2:26 PM

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