Feds invest in biofuels for the Navy

The federal government said it is awarding three contracts worth $210 million to develop “drop-in” biofuels for the Navy to use.

Agriculture Secretary Tom VilsackThomas J. VilsackUSDA: Farm-to-school programs help schools serve healthier meals OVERNIGHT MONEY: House poised to pass debt-ceiling bill MORE, Navy Secretary Ray Mabus and Deputy Energy Secretary Dan Poneman announced the contracts Friday at the White House after working together on the program for three years.

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“For me, it’s really about the importance of rural America and rebuilding an economy that really needs to be rebuilt in an important part of our country,” Vilsack said at the event.

“The ability for us to provide a better fuel source, a cheaper fuel source, an environmentally better fuel source, a job-creating fuel source, in the very area of the country that helps to support our military, is going to make this country a much stronger country and a more secure country,” he said.

The contracts were made possible by the Defense Production Act, which allows the Defense Department to invest in new technologies that it needs but that are not at the full-scale production necessary for military needs.

The awards will go to Fulcrum Bioenergy, Redrock Biofuels and Emerald Biofuels. Each company will use waste products to create the biofuels, which Vilsack said eliminates the “food versus fuel” question pervasive with biofuels such as corn-based ethanol.

The companies will produce more than 100 million gallons annually of jet fuel and diesel fuel that meets Navy specifications.

The administration officials repeatedly emphasized the national security benefits of diversifying the Navy’s fuel sources.

“The link between energy security and national security and international stability couldn’t be more obvious than it is today,” Mabus said.

Price fluctuations in oil mean that the Defense Department spends unbudgeted billions annually when international security threats causes costs to increase.

But depending on oil also means that supply lines are always at risk. And refueling vehicles is often dangerous for operations.

“We want to make sure that energy is not used as a weapon against the United States Navy, against the United States Marine Corps or against the United States,” he said.

Mabus also said the Navy has been at the forefront of many energy shifts in the United States, including shifting to coal from wind, to oil from coal and introducing nuclear power in the last century.

“We are dealing with a number of existential issues and none is more present or looming than that of climate change,” Poneman said. “The role of biomass in that larger struggle is fundamental.”

Poneman said it is important for the country as a whole to diversify energy sources. But biofuels made from waste materials also cut down on greenhouse gas emissions, he said.

“Winning the race to develop drop-in biofuels will enhance our nation’s energy security by adding a new source to our diverse supply of fueling sources and by reducing our reliance on imported oil,” he said.

The contracts announced Friday are just the latest form of assistance the federal government has given to renewables. It has included $750 million in loan guarantees for plants and $320 million in research on feedstocks.