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

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.”

Topics: Aviation, Business Trends, Defense Department, DOD Budget, DOD Policy, Energy, Alternative Energy, Climate Change, Energy Security, Power Sources, Procurement