Who Is Responsible for Making Biofuels Affordable?
by Dan Parsons (National Defense Magazine) … Military leaders, particularly within the Navy, want to find a drop-in alternative fuel that will reduce their dependence on foreign oil, but do not want to pay a premium for it. Industry is poised to deliver, but will require a massive infusion of capital to scale emerging technologies, thereby bringing down the price of biofuels that can cost many times more than petroleum products.
Navy and Marine Corps leaders delivered the message at an industry conference Oct. 17 that renewable energy is an essential strategic need. Industry representatives countered that the Defense Department would have to swallow paying as much as $40 per gallon until they can shell out serious investment dollars.
“If Americans don’t invest in figuring out how to produce renewable fuels at scale and then invest in the infrastructure needed to produce billions of gallons, we will be in a world of hurt,” Mike Ritzenthaler, a senior research analyst for Piper Jaffray, a global investment bank, said at the National Defense Industrial Association’s annual Naval Energy Forum.
…(Sir Richard) Branson likened biofuels and other renewable energy technologies to government sponsored development successes like the Global Positioning System and computers — both technologies that grew out of defense programs that were seen as prohibitively expensive in their infancy.
…The Navy’s role in ramping up production is “substantial,”(Mike) McAdams said. Not only can the service provide large collateral agreements wherein a certain production run is subsidized up front, but Navy ships and planes can also demonstrate the fuel’s effectiveness, he said. Still, “commercializing new technologies is remarkably, remarkably hard,” Ritzenthaler said. “Biofuels will only garner the required public support when oil prices are high enough to drive a meaningful disparity between incumbents and alternatives. READ MORE
