May 29, 2012, Washington, DC - The U.S. military is becoming a major player in biofuels and renewable energy markets according to U.S. Senator Mark Udall on the all-energy news and talk program Platts Energy Week.
May 29, 2012 By Platt Energy Week
May 29, 2012, Washington, DC – The U.S. military is becoming a major player in biofuels and renewable energy markets, said U.S. Senator Mark Udall, Democrat-Colorado, on the all-energy news and talk program Platts Energy Week. Video may be accessed and used at this link with attribution to Platts Energy Week: www.plattsenergyweektv.com/.
The Department of Defense in 2011 bought 450,000 gallons of biofuels for fighter jets and other aircraft and it plans to become an even bigger buyer in the years to come. The Army, which spends more than one billion dollars per year to power its facilities, is looking more at solar, wind and other forms of renewable energy to cut that cost and the Navy is focusing on using biofuels and other alternatives to meet half its energy needs by 2020.
While these alternatives are costly compared with conventional fuels, the effort to invest in the new technology is worth it, Udall, a member of the U.S. Senate Armed Services, Select Intelligence and Energy & Natural Resources Committees, said.
"I think The Penatgon should continue to invest in biofuels … in the long run, it'll be cheaper. The forces we have to deploy overseas to protect oil supply lines can be reduced … as fossil fuel prices increase – and they will, and we know that as a given — having a competitor in the essence of biofuels will be important,” Udall said.
"Yes, we should be smart about it — we're not going to convert overnight to these new fuels — but this is a step forward for national security, for job creation, and there will be environmental benefits."
The Navy in December paid $26 per gallon (/gal) for drop-in biofuels, while jet fuel costs at the time were about $4/gal. The Navy projected that the cost of biofuels in 2020 still would be higher — a premium of about $5.40/gal, according to one Pentagon report — than conventional jet fuel.
"Those numbers should not be ignored," Udall said, "But if you look at history and look at trends, those numbers are going to go down and we will be well served in the long run by making these investments."
"I'm convinced that, over time, the price of these biofuels is going to drop dramatically," Udall said. "We should, I think, in the overall R&D budget for the military, make this kind of investment."
"Not every bet pays off, but I'm convinced it's the right thing to do."
The market for biofuels is robust without military involvement, as the U.S. is importing less oil than it has in decades in part because of advances in ethanol and other biodiesels, he said.
"The marketplace will continue to grow, but certainly the Pentagon's involvement would add heft, it would add momentum, it would add importance to what we're trying to do," Udall said.
And Udall sees the commitment as more important even as the availability of government subsidiaries for renewable energies tapers off.
"The Pentagon has a healthy budget — national security is on the top of everyone's list. . . there's a synergy here that I think is very important,” explained Udall. “It would be short-sighted, in my opinion, to cut off this work that the military is doing right now."
But not everyone agrees. For instance, the U.S. House of Representatives is considering a bill that would keep the military from buying biofuels if they cost more than conventional fuels.
While Udall sees the House move as "worrisome," he believes that investments would continue after lawmakers agree on greater congressional oversight.
"If it makes sense to our military leadership, then I think we ought to back them up. I think this is a frontier that we ought to embrace as Americans," he said, adding "they know the price of being dependent on fossil fuels, particularly those that are produced in a foreign setting."
Army Initiatives for Cutting Fuel Costs
In another program segment, Richard Kidd, the U.S. Army’s deputy assistant secretary for energy and sustainability, explained the Army’s plans to solicit private sector investments for the installation of solar, wind and other forms of renewable energy at its sites.
Navy Progress Towards 2020 Alternative Energy Goal
Tom Hicks, the U.S. Navy’s deputy assistant secretary for energy, offered a detailed update on next steps in the division’s 2020 goal of meeting fifty percent of its fuel needs through biofuels.
In this week’s “Market Spotlight,” Platts Global Director of News John Kingston reported on the latest developments in the supply and demand for crude oil and implications for gasoline prices through the summer driving season.
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