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National Defense > Blog > Posts > In Pursuit of Alternative Fuels, Air Force and Navy Take Divergent Paths (UPDATED)

7/11/2012

In Pursuit of Alternative Fuels, Air Force and Navy Take Divergent Paths (UPDATED)
By Sandra I. Erwin
Navy leaders have endured a barrage of criticism from lawmakers in recent months for pouring millions of dollars into alternative fuels for a “great green fleet.”

Both House and the Senate amendments to the fiscal year 2013 defense authorization bill are seeking to curtail what opponents regard as wasteful spending on costly fuels at a time of declining military budgets.

The Air Force, which also has been purchasing synthetic and biofuels since 2007, notably has been spared from censure.

Over the course of many congressional hearings, “I don’t recall any criticism being levied against the Air Force for what we’re doing,” said Air Force Deputy Assistant Secretary for Energy Kevin T. Geiss.

While both services are seeking substitutes to petroleum-based jet fuel, the Air Force has avoided controversy by insisting that it is a “consumer,” and not a “producer” of alternative fuels.

“We stick with our core competency,” which is to study the impact of fuel blends on Air Force aircraft, Geiss said July 11 at a news conference in Washington, D.C., sponsored by The Energy Daily, IHS Clean Energy Direct and alternative fuel manufacturer Gevo.

The congressional amendments, which will be sorted out in a House-Senate conference, would preclude the military services from buying alternative fuels for use in operations unless they cost the same or less than fossil fuels.

Geiss said he opposes legislation that sets strict price limits because it could prevent Air Force commanders from buying fuel overseas, where price points might be different than in the United States.

But he drew a sharp distinction between how the Navy and Air Force regard their roles in the still embryonic biofuels market.

“Our fundamental position is that we are consumers, not producers,” Geiss said. “We do not see the Air Force positioned to get into influencing production.”

The Navy is more vulnerable to lawmakers’ attacks because it has committed to provide seed funding — in a partnership with the departments of Energy and Agriculture — as part of a $510 million three-year program to spur the domestic biofuels industry. The private sector would provide matching funds. 

Geiss noted that the Navy was directed by the White House to work with DOE and USDA. The Air Force received no such orders.

“The Navy and the Air Force have different goals,” said Geiss. “They have a different strategy.”

The Navy needed large quantities of alternative fuels for its green fleet that was headed to the Rim of the Pacific military exercises June 29-Aug. 3 off the Hawaiian Islands. “In order to sail the green fleet you need a certain quantity of fuel,” Geiss said. The fuel for the exercise is a 50/50 blend of JP-8 and algae-based biofuels.

Navy Secretary Ray Mabus has ardently defended alternative fuel efforts, and has not been deterred by the critics. "In just the test amounts of biofuels we’ve bought, we’ve seen the price come down dramatically," Mabus said in a recent speech. "We’re doing all sorts of things in alternative energy. We’ve certified all our aircraft, fixed wing and rotary wing, on a 50-50 blend of biofuel and avgas. The Blue Angels have flown on this blend. We’ve flown almost twice the speed of sound; the airplanes don’t notice a difference."

The Air Force has avoided high profile projects such as the green fleet and only is buying small amounts of biofuels for research. “We want to be ready to buy it if it’s cost competitive.”

The Air Force spends about $9 billion a year on jet fuel. It has purchased approximately 446,000 gallons of 50/50 biofuel blends since 2009, according to an Air Force spokeswoman. During that same period, the Air Force acquired nearly 7.5 billion gallons of jet fuel.

Geiss noted that no single service or agency by itself is capable of ending the military’s or the nation’s oil dependency. “None of us is going to solve this problem alone. This is a problem that is too large.”

But it is clear that earlier enthusiasm in the Defense Department for biofuels is waning. During a 30-minute presentation on Air Force energy-saving initiatives at the press conference, Geiss did not once utter the word “biofuel.” Only in the question-and-answer session did he address reporters’ queries on the service’s ongoing biofuels research, its future plans and the current legislative hurdles.

The Pentagon’s biofuel retrenchment also is evident in a new policy that requires the military services to obtain approval from the office of Assistant Secretary of Defense for Operational Energy Plans and Programs Sharon E. Burke before they can spend funds on alternative fuels.

“All DoD investments in this area will be subject to a rigorous, merit-based evaluation, and will be reviewed as part of the annual budget certification process,” stated the policy, which Burke signed July 5.

[UPDATED July 12] Burke said in a statement to National Defense that the new policy does not restrict research, development, testing, and evaluation of specialty fuels that enhance military capabilities. "It does not restrict RDT&E activities to identify candidate fuels (or fuel additives) for certification/qualification and field demonstration," Burke said.

Burke noted that "all of the military services have recognized the vulnerability of our singular dependence on petroleum. So, while the services have different roles to play and missions to meet, the policy lays out a set of common principles that can help guide our interactions with outside stakeholders, pool resources, and keep up to date with the latest technical developments when it comes to alternative fuels."

The current controversy over military use of biofuels may end one day, if and when alternatives become more price competitive. GOP lawmakers, particularly, have zeroed in on media reports that the Navy paid $26 per gallon for green-fleet biofuels, and have chided Secretary Mabus for backing these efforts at a time when oil prices are stable, and domestic production is rising.

The Defense Department on average consumes about 340,000 barrels per day of liquid fuels. Of this amount, about 250,000 is jet fuel. Total Air Force liquid fuel consumption is about 160,000 barrels per day.

Geiss said he is confident biofuel prices will drop eventually. But it could take years. He often asks producers for cost projections and usually gets the same, frustrating, response. “It’s going to cost a little bit more than JP-8” military jet fuel, he said. “There’s not a lot of value in that response,” he added. “There’s still a large number of uncertainties in that industry.”

Companies are going to have a tough time securing financing until they know what financial incentives will be available, Geiss said.

Military biofuel programs also were dealt a big blow by RAND Corp. analysts who concluded in a June 20 report that little justification can be found for Defense Department investments in alternative fuels.

“DoD is among the world’s largest purchasers of petroleum but even so, accounts for only 0.4 percent of worldwide petroleum production,” the report said. There is no reason to believe that there will not be ample oil supplies to satisfy military needs for the foreseeable future, RAND said.

“RAND work on alternative fuels have found that significant national benefits would accrue from establishing a large (i.e., millions of barrels per day), commercially competitive alternative-fuels industry in the United States,” the report said. “But alternative fuels do not appear to offer direct military benefits.”

Geiss and other defense officials have argued that the rising cost of fuel is a drain on the services’ budgets, and often have complained about the volatility of oil prices.

James Bartis, a RAND senior policy researcher who co-authored the study, called this a case of “military planners afflicted with petroleum anxiety.” To put things in perspective, he noted that the military’s fuel expenditures are only 5 to 6 percent of their entire budget, whereas commercial airlines’ fuel bills can amount to 30 to 40 percent of their annual expenditures.

Biofuel advocates, meanwhile, insist that the Defense Department should lead the way as a seed investor and early adopter of renewable technologies that later could transition to the civilian world.

Dependence on oil, green-fuel supporters insist, is a national security vulnerability. “Until and unless we develop alternatives, the United States has no choice but to do whatever it takes in order to obtain a sufficient supply of oil,” said Mike Breen, vice president of the progressive Truman National Security Project

Because there are no viable alternatives to oil, the U.S. military “spends tremendous time and resources safeguarding global oil supplies,” Breen told the House Energy and Commerce Committee subcommittee on energy and power. He cited another RAND study that estimated that removing the mission to defend oil supplies and sea routes from the Persian Gulf would save between 12 and 15 percent of the entire defense budget, or more than $90 billion dollars annually.

Posted at 4:46 PM by Sandra Erwin | Permalink | Email this Post | Comments (1)

Comments

Re: In Pursuit of Alternative Fuels, Air Force and Navy Take Divergent Paths

Biofuels, particularly algae, have become a Navy vanity project pursued despite the scientific evidence. The Navy blatantly ignored the first RAND study that unambiguously said biofuels are of no use to the military in January of 2011 (see the New York Times piece at http://www.nytimes.com/cwire/2011/01/25/25climatewire-biofuels-of-no-benefit-to-military-rand-11643.html).  The U.S. military seems to confuse entrepreneurs and start-ups with "industry" and swallows whole everything they promise.  When spending other people's money, careless risks are often taken quite casually.  This is not much different than the behavior of the collapsing Wall Street investment houses and Fannie Mae.  Who would go to Vegas and play "all of the above" with their own money?  The Great Green Fleet of 2016 will require 3 million barrels of fuel.  Anyone want to double down on algae?
Cliff Claven at 7/11/2012 8:44 PM

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