Biofuels Defense Investments Announced

The Obama administration today announced new investments in the biofuels industry as part of the Defense Production Act (DPA).

The U.S. Department of Agriculture (USDA), Navy and Department of Energy jointly announced $30 million in federal funding to match private investments in commercial-scale advanced drop-in biofuels. The Energy Department is also announcing a total of $32 million in new investments for earlier stage research that will continue to drive technological breakthroughs and additional cost reductions in the industry.

“This is an important next step in the President’s direction to Navy, Agriculture and Energy to work together to support the commercialization of ready-to-use, drop-in, advanced biofuel substitutes for diesel fuel and jet fuel,” said U.S. Secretary of the Navy Ray Mabus. “This funding opportunity will enhance our national security and support the creation and commercial-viability of a defense-critical industry – domestic biofuels.”

Mabus explained that the DPA is an authority specifically designed to support defense-critical domestic industries, which includes energy. “Every time the price of oil goes up $1 a barrel, it costs the Navy an additional $30 million in fuel costs,” he added. “We don’t want to trade readiness for fuel. Diversity of supply is one of the keys to energy independence and energy security.”

“This is a matter of national security, energy security and also good for rural America,” said Agriculture Secretary Tom Vilsack. “It opens up great promise for the development of non-food feedstocks as a potential cash crop for farmers throughout the United States. The refineries that will be converting this biomass into fuel will likely be located in rural areas, helping to create jobs.”

The Funding Opportunity Announcement (FOA) made possible through the DPA, will be carried out in two-phases, with government and industry sharing in the cost. In Phase 1, applicants will submit a design package and comprehensive business plan for a commercial-scale biorefinery, identify and secure project sites and take additional required steps spelled out in the announcement. Awardees selected to continue into Phase 2 will submit additional information for the construction or retrofit of a biorefinery.

Listen to a portion of this morning’s press announcement with Mabus and Vilsack:
Administration Press Conference

One thought on “Biofuels Defense Investments Announced

  1. Congress has been subsidizing biomass crops to the tune of $6 Billion a year since 2005. The Department of Energy has already spent more than $600 Million on biorefineries since 2010. The IRS has been granting millions in annual tax breaks. The USDA has been giving out hundreds of millions in loan guarantees to the likes of Range Fuels that implode in high-profile bankruptcies. Now the Administration is using the Department of Defense to funnel more subsidies. These refineries go out of business (or never start) as soon as the free money dries up. Google “ethanol bankruptcy” and the endless list will water your eyes. There are failed biorefineries for sale all over the country, yet a government $16 Trillion in the hole is spending taxpayer money to build more. Since 2007, the U.S. Military has purchased 1.3 million gallons of biofuels at an average price of $48 per gallon. Biofuels are not just bad economics, they are bad thermodynamics. Dead end.