Navy Energy Officials Predict Biofuels Will Be Cost-Competitive by 2020

NATIONAL HARBOR, Md. — The Navy's goal is ambitious: By 2020, half of the service’s total energy requirement will come from alternative sources. To meet the challenge, industry must produce 8 million barrels of alternative fuels annually, Navy officials said April 12 at the annual Navy League convention.
“The question is can the market do that? Can they respond in quantity? Can they respond in price points to meet our needs? ... We feel the answer is a resounding ‘yes,’” said Thomas W. Hicks, deputy assistant secretary of the Navy for energy.
When the Navy first began exploring the viability of alternative fuels for use across the fleet, officials worked with Massachusetts Institute of Technology’s Sloan School of Management to calculate price points at which biofuels would be competitive with petroleum-based products. The resulting study revealed that cost parity with the existing price of oil would occur slightly after 2020, said Rear Adm. Philip H. Cullom, director of the Navy’s energy and environmental readiness division.
“If there are incentives from government to move things, to scale up in industry, then it could happen much more quickly,” he said. The parity point could be as early as 2018, or earlier, depending on the level of incentives, he added.
“We’re looking for something sooner than later,” Hicks told National Defense. “This is a role that the government has played in the past, in terms of moving markets, helping to mature markets,” including coal and nuclear power, he said. “We’re going to lead the way here as well. Doing so in constant communication with industry, with commercial aviation, with maritime industry, we’ll really be able to advance this and get the fuels that we need, I am convinced, if not by 2020, then earlier and at the right price points we need to really power the fleet.”
President Obama last month directed the Navy to work with the Agriculture Department, the Energy Department and the private sector to create an advanced biofuel market capable of powering not only military fighter jets, but also trucks and commercial airliners.
“We’ve been working closely with USDA and DOE over the last weeks and months to build to this effort. We are very excited about the path that we have forged,” Hicks said.
Both Energy and Agriculture have loan guarantee programs and grant initiatives at their disposal that Navy officials hope to leverage to advance biofuel production across the country. That would enable the Navy to stay on track with its plans to demonstrate next year a carrier strike group operating locally on alternative fuel.
“To do that demo, we need about 8,000 barrels of alternative fuel — biofuel, roughly split 50-50 with F-76 and JP-5,” petroleum-based fuels, Hicks said. When that strike group, powered solely by alternative energy, deploys for real-world operations in 2016, the number of necessary barrels climbs to 80,000.
The technology is “ripe” for industry to produce biofuels in quantity, said a General Atomics representative as he stood behind vials of switchgrass and jars of algae and biofuel on display in the exhibit hall. It’s only a matter of having enough funding to scale up the pilot plants and processes, he said. The San Diego-based company, today better known as the manufacturer of the Predator and Reaper family of military drones, has capitalized on its original roots in energy to develop several processes to grow and produce algae-based biofuel. The Defense Advanced Research Projects Agency is funding an expansion of its half-acre phototropic algae production facility on the Hawaiian island of Kauai. The larger facility will house eight acres of algae ponds and associated equipment to scale up its production of biofuels by the end of the year. A commercially viable facility would require 1,000 acres to 5,000 acres to produce biofuels adequate to meet the demand.

Topics: Energy, Alternative Energy, Shipbuilding, Surface Ships