In the funding opportunity announcement, the administration said it was aiming to establish "one or more complete domestic value chains capable of producing drop-in replacement biofuels. This includes feedstock production and logistics, conversion facility (Integrated Biorefineries), and fuel blending, transportation and logistics."
The target is for "at least 10 million gallons per year" of biofuel production capacity. That's about 10 million gallons more per year than many in Congress – Republicans in particular – would like to see.
In early May, you might recall, the Republican-controlled Armed Services Committee included a provision in the 2013 Defense Department budget that would ban the department from buying alternative fuels that are more expensive than conventional fuels. That's just a clever way of cutting off the biofuel spigot, since the military is paying a premium for its biofuels, some derived from algae oil and animal fats, to help build a biofuels supply chain that's in its infant stages.
Surprisingly, the Democratic-controlled Senate Armed Service Committee then went along with this House provision.
At a hearing last month, Defense Secretary Leon Panetta told the House committee that the biofuels ban "could deprive commanders of the flexibility they need to meet tactical and operational needs, and make us more exposed to potential supply disruptions and future price volatility of petroleum products."
But critics have pointed with outrage to the Navy's $12 million purchase, announced late last year, of 450,000 gallons of biofuels from two companies: Solazyme, the South San Francisco-based startup that ferments algae to produce oil that can be refined into fuel; and Louisiana-based Dynamic Fuels, a Tyson Foods-Syntroleum joint venture that makes its fuel from used cooking oil and non-food-grade animal fats. The plan is to use the fuels this summer in 50-50 blends with standard diesel and aviation fuel in ships and aircraft taking part in what the Navy calls the world's largest international maritime war games, the Rim of the Pacific exercises off Hawaii.
In its latest move to spur biofuels development and use by the military, the Obama administration is using the Defense Production Act, legislation more than a half-century old that has been used to boost industries such as steel, aluminum, titanium, semiconductors, beryllium, and radiation-hardened electronics.
"DPA is a critical component of strengthening our national security, and energy is a national security issue," Navy Secretary Ray Mabus said in a statement. "Our reliance on foreign oil is a significant military vulnerability and it would be irresponsible not to address it. Pursuing a viable, domestic alternative is the best way to preserve the budget for operational necessities like training and shipbuilding, and this funding opportunity is an important step in accelerating an economically self-sufficient alternative fuels market."
Along with the new military biofuels initiative, the military this week announced new investments totaling $32 million in earlier stage biofuels research. The funding includes $20 million "to support innovative pilot-scale and demonstration-scale biorefineries that could produce renewable biofuels that meet military specifications for jet fuel and shipboard diesel using a variety of non-food biomass feedstocks, waste-based materials and algae," the DOE said.