Navy to Launch Great Green Fleet with 77 Million Gallon Buy of Cost-Competitive, Non-Food Advanced Biofuels Blends

by Jim Lane (Biofuels Digest) They’re here. $2.05 per gallon, at-scale, domestically produced advanced renewable fuels — utilizing non-food feedstocks and based on next-generation technology. The Navy’s 7-year quest to diversify its fuel supply without paying more or changing its fuel spec reaches a key milestone.

In Washington, The Department of the Navy has obtained 77.66 million gallons of cost-competitive, drop-in biofuels blends in support of the launch of the Great Green Fleet, which will officially debut January 20th in San Diego at a launch ceremony that will attract US Secretary of the Navy Ray Mabus and US Secretary of Agriculture Tom Vilsack.

The fuel provided meets the F-76 marine diesel specification — somewhat different and more complex than conventional diesel because of the at-sea requirement for fuels with a lower flash point. The price for the fuel to the DLA is $2.05 per gallon.

So, yes, renewable fuel fans, the Navy will be running on the fuel that Islamic State can’t make or seize. It’s cost-competitive, drop-in, non-food, next-gen, advanced renewable fuel. And this buy is from AltAir.

The Navy concluded in 2009 that expanding military energy sources improves the reliability of its overall fuel supply, adds resilience against supply disruptions, and gives the military more fuel options to maintain its readiness and defend the national security interests of the United States. Following that determination, the Navy embarked on a lengthy set of aircraft and ship certifications, including an extended demonstration of advanced fuel blends at the 2012 RIMPAC exercises.

It’s the Rocky Mountain/West Coast buy, so it will supply all the Navy’s US West Coast operations, as well as operations out of Pearl Harbor, including the 2016 RIMPAC exercises out of Pearl Harbor, which will involve the fleets of more than 30 nations.

This particular phase of deployment of advanced renewable fuels stems from the 2015/16 Rocky Mountain/ West Coast advanced biofuels solicitation posted on the FedBizOpps website, last April. This solicitation was for fuel deliveries from 1 October 2015 to 30 September 2016.

Ultimately, all four of the Navy’s regional fuel regions (Eastern Pacific, Inland/East Coast, Middle East/EU and Rocky Mountain/West Coast/Offshore) will be making advanced renewable fuels part of the “business as usual” of the Defense Logistics Agency’s purchasing. Expect that to start happening, well, now.

But the story will begin to transition offshore for the Navy, which refuels at friendly ports around the world.

One of the goals of the Navy in its biofuels program is “not to have to sail to the Middle East every time we re-fuel,” as one Navy source put it. “But sailing to Kansas doesn’t work, either.” Ultimately, the Navy’s goal is to stimulate the production of domestically sourced, cost-competitive renewable fuels around the world to support Naval operations with diversified supplies.

The biofuels sought by the Navy can be blended in a range of 10 to 50 percent with conventional petroleum products and must meet all military fuel specification properties which make handling requirements and performance indiscernible to the end-user. In this case, the winning bid featured 10 percent blends.

The Digest understands that 15 cents per gallon has been provided by USDA under this fuel development program to defray the additional costs of using a domestic feedstocks. Produced in California, the fuel also qualifies under the Low Carbon Fuel Standard and under the Renewable Fuel Standard, and qualifies for the newly renewed blender’s tax credit for renewable diesel and biodiesel approved by Congress last month. Since AltAir is blending fuels and is not an obligated party under the Renewable Fuel Standard, Sherbacow confirmed to The Digest that the company is selling RINs into the market.

Those carbon policy supports make a big difference. For example, AltAIr did not bid on the East Coast/Gulf/Inland Navy contract last year — knowing that the Rocky Mountain/West Coast contract was more advantaged for them, as those fuels would qualify under the Low Carbon Fuel Standards if sold into the California market.

But, there’s another advantage that goes beyond policy supports. This process makes a very high quality renewable diesel that meets the more stringent California fuel standards. So, it commands a higher price in California.

What can we say about the feedstock? It’s all residues — primarily, inedible or waste fats, oils and greases.

For those less familiar with the story, AltAir has taken over the old Paramount (California) refinery and converted it to the production of renewable fuels.

The refiner will be the first in the U.S. able to produce diesel and drop-in replacements for petroleum-based jet fuels.

The opening of the AltAir refinery will create 150 jobs in Paramount, California. The biofuel will be mixed with traditional jet fuel at a 30/70 blend ratio. The AltAir Fuels refinery will produce 30 million gallons of advanced biofuels, including low-carbon renewable jet fuel and other renewable products. READ MORE