President Obama Announces Major Initiative to Spur Biofuels Industry and Enhance America's Energy Security

Agriculture (USDA)Aviation Fuel/Sustainable Aviation Fuel (SAF)BioRefineries/Renewable Fuel Production Business News/Analysis Defense (DOD)Energy (DOE)Federal Agency/Executive Branch Funding/Financing/Investing grants Marine/Boat Bio and Renewable Fuel/MGO/MDO/SMF Navy Policy Process R & D Focus

August 16, 2011

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(The White House) USDA, Department of Energy and Navy Partner to Advance Biofuels to Fuel Military and Commercial Transportation, Displace Need for Foreign Oil, and Strengthen Rural America

President Obama today (August 16, 2011) announced that the U.S. Departments of Agriculture, Energy and Navy will invest up to $510 million during the next three years in partnership with the private sector to produce advanced drop-in aviation and marine biofuels to power military and commercial transportation. The initiative responds to a directive from President Obama issued in March as part of his Blueprint for A Secure Energy Future, the Administration’s framework for reducing dependence on foreign oil. The biofuels initiative is being steered by the White House Biofuels Interagency Work Group and Rural Council, both of which are enabling greater cross-agency collaboration to strengthen rural America.

“Biofuels are an important part of reducing America’s dependence on foreign oil and creating jobs here at home,” said President Obama. “But supporting biofuels cannot be the role of government alone. That’s why we’re partnering with the private sector to speed development of next-generation biofuels that will help us continue to take steps towards energy independence and strengthen communities across our country.”

Increased use of advanced biofuels is a key component of the Administration’s energy security agenda, but there is currently a lack of this manufacturing capability for next-generation drop-in biofuels in the United States. To accelerate the production of bio-based jet and diesel fuel for military and commercial purposes, Secretary of Agriculture Tom Vilsack, Secretary of Energy Steven Chu, and Secretary of the Navy Ray Mabus have developed a plan to jointly construct or retrofit several drop-in biofuel plants and refineries. This effort will help address energy security and national security challenges, and will provide economic opportunities in rural America.

“America’s long-term national security depends upon a commercially viable domestic biofuels market that will benefit taxpayers while simultaneously giving Sailors and Marines tactical and strategic advantages,” said Navy Secretary Ray Mabus. “Today’s announcement not only leverages our home grown fuel sources to support our national security, but it also helps advance the biofuels market, which ultimately brings down the cost of biofuels for everyone.”

“By building a national biofuels industry, we are creating construction jobs, refinery jobs and economic opportunity in rural communities throughout the country,” said Agriculture Secretary Vilsack. “As importantly, every gallon of biofuel consumed near where it is produced cuts transportation costs and, for the military, improves energy security.”

“These pioneer plants will demonstrate advanced technologies to produce infrastructure-compatible, drop-in renewable fuels from America’s abundant biomass resources,” said Energy Secretary Chu. “It will support development of a new, rural-focused industry that will replace imported crude oil with secure, renewable fuels made here in the U.S.”

The joint plan calls for the three Departments to invest a total of up to $510 million, which will require substantial cost share from private industry – of at least a one to one match. The partnership aims to reduce U.S. reliance on foreign oil and create jobs while positioning American companies and farmers to be global leaders in advanced biofuels production. The United States spends more than $300 billion on imported crude oil per year. Producing a domestic source of energy provides a more secure alternative to imported oil and improves our energy and national security.

In June, President Obama signed an Executive Order establishing the first White House Rural Council to build on the Administration's robust economic strategy for rural America and make sure that continued federal investments create maximum benefit for rural Americans. Administration officials have been working to coordinate programs across the government and encourage public-private partnerships to improve economic conditions and create jobs in rural communities.

President Obama's Administration has taken significant steps to improve the lives of rural Americans and has provided broad support for rural communities. The Obama Administration has set goals of modernizing infrastructure by providing broadband access to 10 million Americans, expanding educational opportunities for students in rural areas, providing affordable health care, promoting innovation and expanding the production of renewable energy. In the long term, these unparalleled rural investments will help ensure that America's rural communities are repopulating, self-sustaining, and thriving economically. READ MORE and MORE (Biofuels Digest) and MORE (Air Transport Association) and MORE (Advanced Biofuels USA) and MORE (Advanced Biofuels Association) and MORE (Politico) and MORE (Biofuels Digest survey of industry reaction) and MORE (Biorefining Magazine) and MORE (Biofuels Digest's "Take") and MORE (DomesticFuel.com; includes audio of DOE/USDA/DOD Navy press conference) and MORE (Bloomberg) and MORE (US Navy) and MORE (Global Justice Ecology Project) and MORE (Aviation Week)

Excerpts from Politico: The money will come evenly from all three departments. Agriculture will take its $170 million from the Commodity Credit Corp., the Navy will repurpose existing funds, and DOE expects its 2012 budget to allow it to reinvest in 26 technology projects it previously funded. The money will go toward helping the industry retrofit plants and refineries.

The Navy, which plans to cut its use of fossil fuels in half by 2020, will need 8 million barrels of biofuel to achieve that goal. The biofuel plant projects — which will be awarded through competitive bidding — will be located around the country, although the Navy will want to ensure that they are in places that can reasonably deliver to the military, Navy Secretary Ray Mabus said during the call.

“We want this biofuel industry to be geographically diverse across the United States,” he said. “But the ability to deliver to navy bases — whether they’re in Norfolk, San Diego or Washington state — the ability to get the fuel there is something we’ll look at when we address the proposal.” READ MORE

excerpt from Bloomberg: ...Funding will be doled out through competitive bids and will be split equally between the three agencies.

Publicly traded biofuel companies with well-defined commercialization plans may qualify for some of the government investment, Stacey Hudson, an analyst at Raymond James & Associates, said today in an e-mail.

‘Attractive Partners’ “The visibility provided by these companies, as well as their relatively strong cash positions following recent IPOs, may make them attractive partners,” Hudson said. “The ability to contribute private money seems like it will be a key factor in the competitive allocation.”

Amyris Inc. (AMRS), Gevo Inc., Solazyme Inc. and Kior Inc. are all developing biofuels and have completed initial public offerings in the last year.

Solazyme also supplied algae-based jet fuel and marine diesel to the Navy for testing. “Companies that have already been in talks with the military may have an advantage,” Hudson said.

Energy Secretary Steven Chu singled out Gevo as a potential candidate. READ MORE

Excerpts from US Navy press release: ..."The Navy can be the market," Mabus said. "We have a big need for biofuels. It will make us better warfighters, it will save lives, and it will reduce a vulnerability in our military that we simply shouldn't have."

...The Navy will "repurpose existing funds" for its $170 million share of the investment, Mabus said. "It's a matter of setting priorities," he added. READ MORE

Excerpt from Global Justice Ecology Project: These so-called “next generation biofuels” will monopolize large tracts of land for the growing of crops to feed cars. This will accelerate the already rampant planetary deforestation, take over agricultural lands that could be growing food, and displace poor and Indigenous peoples from their lands. Unproven and highly dangeous synthetic biology is being used in this research. Some of the feedstocks being investigated for the development of these fuels include low-lignin genetically engineered trees (also called GM trees or GMO trees). GE trees have a host of dangers all of their own, especially their escape into and destruction of native forests and dangerous impacts on forest dependent communities. Biofuels are not any kind of solution, but a new form of the same old problem of land grabs, food and water crises and overconsumption by the Industrialized North. READ MORE