Never has such a small government payout generated such a busy PR reaction. Late last weeek – and very quietly – the Defense Department awarded three biofuels firms $16 million to craft plans for biorefineries that would produce fuels meeting military specifications.
Jim Lane at Biofuels Digest has been tracking this development closely and he points out that “A coalition of Advanced Biofuels Association, the Air Line Pilots Association, Airlines for America, the American Council on Renewable Energy, the American Farm Bureau Federation, the American Security Project, the Biotechnology Industry Organization, the National Farmers Union and Operation Free was swift to applaud the DoD.”
There are two main reasons why these tiny grants (each requires matching funds from the contracting companies) are fairly big news. One is that military spending on biofuels is a very touchy subject in Congress and there were some doubts about whether the program would move forward in this time of austerity and sequestration.
Secondly, U.S. airlines (and those around the world) are extremely keen to see the development of drop-in biobased jet fuel. To have the military join them on the demand side may make the difference between getting the stuff and not getting the stuff.
It is important to note that the funding comes out of the Defense Production Act Title II program and was not, in the end, successfully blocked. The program also would contain funds for a phase II portion of the program though money would have to be appropriated from the FY2013 budget.
In lieu of a press release (the DoD did not issue one), here are further program details that I received from a DoD spokesman.
There were three awards totaling $16.0M in government funds, which will be matched by $17.4M in private sector funds for Phase I of the project.
The first awardee is Emerald Biofuels LLC, which is located in Golf, IL – a northern suburb of Chicago. For this project, Emerald has agreed to match $5.4M in government funding with $6.4M of their own. Second, we have Natures BioReserve LLC of South Sioux City, Nebraska which will match $6.0M in government funding with $6.2M of company funds. The third awardee is Fulcrum Brighton Biofuels of Pleasanton, CA which will receive $4.7M in government funding and match that with $4.7M of their own funds.
Phase I of the project involves validation of production technology, verification of technical maturity, site selection, plant design, permitting, and detailed cost estimation, all of which will require 12-15 months to complete. Following Phase I, interagency technical experts will evaluate the projects to determine if they will move on to Phase II, which is for biorefinery construction
If all Phase I projects successfully complete the second phase of this project, awardees project that this would represent more than 150M gallons per year of drop-in, military-compatible fuels with initial production capacity by 2016 at an average cost of less than $4 per gallon.
For now, the U.S. military is sailing in relatively safe waters when it sticks with research and testing projects. But it would need a political mine sweeper ahead of any plans to build its own biorefineries or make large purchase contracts for pricey biofuels such as the $26/gal algae fuel used to power the Navy’s recent exercises off the coast of Hawaii.
Speaking of the Navy, one way to track the progress of biofuels in the military is to keep an eye on the Navy’s Great Green Fleet.
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