A couple of years ago certain leaders in Congress seemed ready to fight to the death against the Navy biofuel program, but that was then and this is now. The Navy has announced the construction of three new biorefineries with a combined capacity of 100 million gallons per year of military grade biofuel. That’s a gigantic step towards establishing a commercial, cost-competitive market for biofuels.
The announcement came in the runup to the historic UN Climate Summit, and it also casts an interesting angle on the big ExxonMobil petrochemical announcement that came in the middle of Climate Week NYC.
More And Better Navy Biofuel
The Navy biofuel initiative got a super-ambitious launch in the early years of the Obama Administration, much to the dismay of certain legislators (okay, so Republicans spearheaded by Senator McCain).
The subsequent legislative maneuvering involved preventing the Navy from purchasing biofuels, under the guise of budget restraints.
However, the Navy pulled an end-run, by investing directly in public-private biofuel pilot projects for next-generation biofuel production including woody biomass, municipal solid waste, and algae.
How’d they get permission to do that? Well, there’s a little something that goes back to the 1950’s called the Defense Production Act, which enables the Department of Defense to partner with the private sector to ensure an adequate stream of domestically produced supplies that play key roles in national defense. So. There.
The Navy biofuel initiative has also involved partnering with the departments of Agriculture and Energy, which brings us to the latest Navy biofuel announcement in concert with those two agencies.
Navy Biofuel Gets Fatter, Woodier, and Wastier
The new initiative demonstrates how quickly the biofuel industry could move away from farmlands and embrace a broader variety of non-food feedstocks that don’t compete with agriculture for growing space. These are not pilot projects, they are full commercial-scale operations.
In partnership with Agriculture and Energy, the Navy is investing in three new contracts for “drop-in” biofuels, though not quite at 100 percent drop-in, though. The performance of a 50-50 blend was verified in action during the 2012 RIMPAC exercises, and the Navy is apparently sticking with that for now.
The RIMPAC (that stands for Rim of the Pacific) exercise included biofuel for Navy aircraft as well as ships, btw.
We’re particularly interested in the Emerald Biofuels project, because when the Navy first announced that it would use biofuel from chicken fat and other waste fats that seemed pretty far-fetched, but apparently it’s going to happen.
Emerald’s contract will result in the construction of an 82 million gallon-per-year refinery using waste fat feedstock. It will be located on the Gulf Coast.
The other two projects are more modestly scaled. One, by Fulcrum BioEnergy, involves a 10 million gallon refinery in Nevada. The feedstock will be municipal solid waste.
The other one is a 12 million gallon-per-year operation by Red Rock Biofuels, which will use waste biomass from forestry operations. That one is located up in Oregon.
Hmmm…Gulf Coast…Nevada…Oregon…If you step back and take a meta-view, you can see how the Navy biofuel program is a win-win. By supporting commercial-scale production, the Navy gets its hands on a secure, regionalized stream of fuel that is buffered from the volatility of the global petromarket.
Here’s Navy Secretary Ray Mabus, who has been a passionate advocate for Navy biofuels, with more on that topic:
The contracts being announced today will help expand the operational capability of our Navy and Marine Corps around the world. In today’s complex fiscal environment, we are balancing our mission with our resources and we must be innovative and forward-thinking. Programs like these help keep our operational capabilities on the cutting edge. This is how Sailors and Marines defend our great nation.
About That ExxonMobil Thing…
That biofuel waste reclamation twofer is a big advantage for biofuel over conventional fuel, but the sticky wicket is to bring down the cost of biofuel to a competitive level with conventional fuels, and that’s where ExxonMobil could be dropping some hints with its latest moves.
Along with the aforementioned petrochemical expansions, which involve overseas refineries, ExxonMobil is also expanding its Baytown, Texas refineries to produce plastic from shale gas.
What do you think, does that mean ExxonMobil sees the competition from commercial scale biofuel on an inevitable upwards climb, eventually making the conventional fuel market less attractive that other high-value markets such as plastics and industrial solvents?
Keep in mind that back in the day, despite howls of opposition the Navy was front and center in our nation’s seagoing move from sail power to coal, and in short order from coal to petroleum and nuclear power.
Could be that ExxonMobil has been keeping close tabs on the Navy’s efforts to support a cost-competitive biofuel market, and sees the writing on the wall. Stay tuned.