US Secretaries of Defense, Agriculture and Energy push for cost-competitive, drop-in advanced military biofuels program

January 5, 2014 |

3musketeersThe Three Secreteers are ‘all for one, and one for all!” in combined push to secure funding for Navy’s Great Green Fleet program — as they drive the US towards $4 per gallon drop-in biofuels.

In Washington, the Secretary of Defense, Secretary of Agriculture, and Secretary of Energy delivered four co-signed letters to the heads of key House and Senate committees and subcommittees, in support of the Navy’s efforts to procure drop-in, cost-competitive advanced biofuels.

In April 2013, the President requested $45 million for the Department of Energy’s cost share, with the DOE at the time writing:

“The increase in funds will be used to partially fulfill the DOE’s obligation to the joint DOD-Navy, DOE, and USDA memorandum of agreement established to support the construction of commercial-scale biofuels production facilities that can produce drop-in, hydrocarbon biofuels.

This $45 million request reflects part of DOE’s $170 million commitment of total funding to this initiative with the DPA.

“The significance of the DPA activity is demonstrated by the President’s invoking Title III of the Defense Production Act. In so doing, the Administration has deemed that this activity is of strategic importance to the national security of the United States. In addition, use of the DPA to support the construction and operation of these vital facilities will serve to validate the biofuels production technologies, contribute to building the emerging market, and facilitate follow-on expansion of the industry by providing the confidence required by the private-sector financial community to finance additional projects to address the market mandated by the Renewable Fuels Standard.

The letters

The letters were sent to Mike Simpson, chairman of the House Subcommittee of Energy and Water Development (Committee on Appropriations); Dianne Feinstein, chairwoman of the Senate Subcommittee of Energy and Water Development (Committee on Appropriations); Harold Rogers, chairmans of the House Appropriations Committee; and Barbara Mikulski, chairwoman of the Senate Appropriations Committee.

“We are writing in support of the Defense Production Act biofuels efforts, an important element of a comprehensive US Government investment in national energy security…Specifically, we urge you to continue your commitment to these efforts by supporting the FY 2014 President’s Budget Request to provide transfer authority for the Secretary of Energy pursuant to Title III of the Defense Production Act and to provide the requested funding.

“In March 2011, President Obama directed DOE, USDA and the Department of the Navy to work together in partnership with private industry to spur development of an advanced drop-in biofuels industry to power our military, commercial aviation, and the shipping sector….Each of our agencies has a unique, important role to play, and in order to make this effort successful, each agency requires the investment of its core competencies as well as funds.

“In May 2013, DoD, on behalf of our three agencies, took the first step in this effort by competitively selecting four companies for Phase I of the DPA Advanced Biofuels Production Project. These companies, if successful in Phases I and II, would deliver up to 170 million gallons of military-compatible fuel per year, with production beginning in 2016 and with at least 50 percent lower lifecycle greenhouse gas emissions than that of conventional fuel. This fuel is expected to be delivered at less than $4 per gallon, which is cost-competitive with DoD’s standard fuel prices. In addition, the government investment for this effort will be exceeded by a private sector cost-share.”

The complete letters can be downloaded here.

The Phase I program

In Phase 1 of the program, the DoD expects to award contracts  to Emerald Biofuels, Natures BioReserve and Fulcrum Biofuels for drop-in military biofuels. The DoD noted:

“There will be a down-select among Phase 1 Recipients for the Phase 2 award(s). Recipients are cautioned that there is no guarantee that a Phase 1 recipient will be selected to proceed into Phase 2.

“The process will entail: Receipt of Phase 2 proposals required as deliverable under Phase 1; application of standard Technical Evaluation processes using established evaluation criteria; negotiation and potential Award(s) of Phase 2 agreements based on overall merit of proposal and pending availability of funding.”

Under the grants, the companies will develop plans for up to 150 million gallon biorefineries that will cost the US military less than $4 per gallon. The biorefineries are expected to supply aviation and marine diesel fuel.

The grants will be matched by $17 million in investments by the companies, which have proposed making biofuels primarily from oil seed crops and waste residues.

The overall Defense Production Act Title II program is divided into two phases: this phase, for plan development. A second phase, which would be funded out of FY 2013 and later year funds, would award up to $180 million in additional contracts to accelerate the construction of at least one biorefinery capable of providing the US military with sufficient sub-$4 renewable fuels to meet its Great Green Fleet plans.

Phase 2 involves the construction, commissioning, and performance testing of such a facility. Performance is expected to be completed within three years of the Phase 2 award.

The pilot-scale biorefinery projects selected will use a variety of nonfood biomass feedstocks, waste-based materials, and algae in innovative conversion processes to produce biofuels that meet military specifications for jet fuel and diesel. The projects will demonstrate technologies to cost-effectively convert biomass into advanced drop-in biofuels and assist these organizations to scale up the processes to commercial levels.

More on those projects, here.

Farm to Fleet

The letters follow on from the unveiling of the “Farm to Fleet” program last month by US Secretary of Agriculture Tom Vilsack and Navy Secretary Ray Mabus, through which the Navy will begin to add biofuels into its regular domestic purchases of approximately 77 million gallons of jet fuel (JP-5) and marine diesel (F-76) each year.

Initial fuel contracts will be awarded in 2015, with initial RFPs commencing in spring 2014 and first deliveries scheduled for mid-year 2015. The fuels will contain biofuels blends of between 10 and 50 percent.

“The Navy’s intensifying efforts to use advanced, homegrown fuels to power our military benefits both America’s national security and our rural communities,” said Vilsack. “Not only will production of these fuels create jobs in rural America, they’re cost effective for our military, which is the biggest consumer of petroleum in the nation.”

“A secure, domestically-produced energy source is very important to our national security,” said Navy Secretary Mabus. “Energy is how our naval forces are able to provide presence around the world. Energy is what gets them there and keeps them there. The Farm-to-Fleet initiative we are announcing today is important to advancing a commercial market for advanced biofuel, which will give us an alternative fuel source and help lessen our dependence on foreign oil.

A comprehensive Guide to Farm to Fleet is here.

The Complete Guide to the Overall Plan

A 10-Minute Guide of the complete Administration plan for cost-competitive military biofuels is here.

The DOE’s FY 2014 Budget Request

The DOE’s budget request for FY 2014 was filed last April. Here are two links that are relevant – starting with 63-pages of highlights.

The complete 634 page budget request for EERE and other energy programs is here.

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