Agriculture, Navy Secretaries Promote U.S. Military Energy Independence with ‘Farm-to-Fleet’
(US Department of Agriculture) Program blends homegrown biofuels with conventional fuels, propelling ships, jets and jobs
Agriculture Secretary Tom Vilsack and Secretary of the Navy Ray Mabus today announced the U.S. Departments of Agriculture (USDA) and Navy’s joint “Farm-to-Fleet” venture will now make biofuel blends part of regular, operational fuel purchase and use by the military. The announcement incorporates the acquisition of biofuel blends into regular Department of Defense (DOD) domestic solicitations for jet engine and marine diesel fuels. The Navy will seek to purchase JP-5 and F-76 advanced drop-in biofuels blended from 10 to 50 percent with conventional fuels. Funds from USDA’s Commodity Credit Corporation (CCC) will assist the effort.
“The Navy’s intensifying efforts to use advanced, homegrown fuels to power our military benefits both America’s national security and our rural communities,” said Vilsack. “Not only will production of these fuels create jobs in rural America, they’re cost effective for our military, which is the biggest consumer of petroleum in the nation. America’s Navy shouldn’t have to depend on oil supplies from foreign nations to ensure our national defense, and rural America stands ready to provide clean, homegrown energy that increases our military’s energy independence and puts Americans to work.”
Farm-to-Fleet builds on the USDA / U.S. Navy partnership inaugurated in 2010, when President Barack Obama challenged his Secretaries of Agriculture, Energy and Navy to investigate how they could work together to speed the development of domestic, competitively-priced “drop-in” diesel and jet fuel substitutes.
“A secure, domestically-produced energy source is very important to our national security,” said Navy Secretary Mabus. “Energy is how our naval forces are able to provide presence around the world. Energy is what gets them there and keeps them there. The Farm-to-Fleet initiative we are announcing today is important to advancing a commercial market for advanced biofuel, which will give us an alternative fuel source and help lessen our dependence on foreign oil.”
Today’s announcement marks the first time alternative fuels such as advanced drop-in biofuels will be available for purchase through regular procurement practices. It lowers barriers for alternative domestic fuel suppliers to do business with DOD. Preliminary indications from the Defense Production Act Title III Advanced Drop-in Biofuels Production Project are that drop-in biofuels will be available for less than $4 per gallon by 2016, making them competitive with traditional sources of fuel.
The program gets underway with a bulk fuels solicitation in 2014, with deliveries expected in mid-2015. USDA and Navy also are collaborating on an Industry Day, Jan. 30, 2014, where stakeholders can learn more about Farm-to-Fleet. READ MORE and MORE (Biofuels Digest)
Excerpt from Biofuels Digest: … In an innovative program, the USDA will make available up to $161 million in Commodity Credit Corporation (CCC) funds — in support for the Navy’s fuel program. The USDA’s support was originally announced by the Administration in 2012. The CCC is a wholly-owned government corporation created in 1933 to “stabilize, support, and protect farm income and prices”.
Under the USDA component of the program, for fuel solicitations in coming years the Navy will be able to access the CCC funds to buy down the cost of the biofuels component of any fuel purchase (using CCC-qualified, domestic US feedstocks), that is above the current price of fuel paid by the Navy.
For example, if the DLA receives a bid for 50 million gallons of military spec (JP-5) jet fuel with a 20 percent biofuels component, in a qualifying year and using CCC-qualified feedstocks, that is 10 cents per gallon above the price that the Navy pays for conventional fuels, then the CCC funds can be “tapped” by the Navy to make up the difference of $5 million in the cost difference between a conventional fuel buy and the green fuels buy.
US Navy to pay the “going rate” for conventional fuels
In this way, the Navy is assured of paying only the going rate for conventional fuels as it makes its transition to a more energy-secure, diversified fuel base.
Having established an assurance of supply with its DPA program, the Navy has established this program to make sure it can obtain fuels from a much wider set of suppliers — ensuring that it has the best chance of eliminating the delta between the cost of conventional fuels and military-spec biofuels as quickly as possible.
In another example, if the DLA receives two bids — both at the same price, but one containing a 30% biofuels blend and one containing a 10% blend, the higher biofuels blend will be selected.
“We don’t want to produce an artificial cap on our purchasing [by specifying blend percentages]. Rather, we want to unleash market forces.” READ MORE
An Industry Day is scheduled for January 30, 2014 in Washington, DC, which is immediately following the Commercial Aviation Alternative Fuels Initiative (CAAFI) General Meeting that is on January 28-29, 2014.
This session is neither intended to offer government insight, nor to answer direct questions and receive comments on bulk fuel purchases held by DLA Energy. Questions related to DLA Energy bulk fuel contracting cannot be answered at this venue.
The meeting will be held on Thursday, January 30, 2014, from 8:00 a.m. to 5:00 p.m., at USDA Jefferson Auditorium, USDA South Building, 14th and Independence, Washington, DC 20250.
There is no cost; however, all attendees must register before January 16, 2014, for the Farm to Fleet Industry Day via email Farm2Fleet.IndustryDay@gmail.com with all of the following required information:
Name and Title:
Position on the Biofuels Production Value Chain: (i.e., feedstock provider, bio-refiner, blender, finished products distributor, subject matter expert, financier, etc.)
Information and details concerning the Farm to Fleet Industry Day (including maps and draft agenda) will be forwarded to those who registered on January 23, 2014.