Navy Biofuels: Strategic Thinking Or Environmental Good Works Program?Navy Secretary Mabus was an ambassador to Saudi Arabia, so he likely understands the strategic value of oil as well as anyone in the military. He may be right to contend it is in our best interests to get off of it. But how much is that worth in a time of budget worries? In December, the Navy bought 450,000 gallons of biofuels at $26.75 per gallon. Outrageous, right? Maybe, but if the Navy is going to have “the Great Green Fleet” by 2016 there has to be more research done on biofuels and that means spending money now. The first fax machine was expensive too.
Secretary Mabus contends that even a $1 increase per barrel means $31 million in fuel costs so alternatives make sense, even if they are not cost-effective right now. And we are talking about $12 million out of a Department of Defense budget around $550 billion. Peanuts. Heck, the new Navy destroyer is almost $6 billion each. $12 million to promote research in alternative fuels is slight. But, as veteran Jonn Lilyea noted, it is not rational to spend $20 a gallon on an alternative to not have to worry about regular fuel changing by $1 a gallon. On the exterior, he is right.
In reality, like farmers, the military has spent two decades 'dematerializing' - between 1985 and 2006, the Department of Defence's total energy consumption declined more than 60%. That wasn't just environmental good work, it also made military and economic sense. Environmentalists should be applauding that but they instead complain about what hasn't been done so their input has little value when it comes to strategic concerns of any country, including on energy issues.
Of course, the whole idea in biofuels is growing fuel locally and that would eventually mean fewer convoys. We have to accept in biofuels what the president did not accept about solar power and therefore has been a fiasco; you can't just throw money around and speed up science, there is no shortcut and there is no magic bullet that will issue forth for energy that makes it profitable and superior all at one time. The Navy uses 1,300,000,000 gallons of fuel per year so 425,000 in biofuels is literally a drop in the military bucket, but it may be a drop that can put us on a path to less energy dependence with countries we have ended up fighting.
science20The long, long (long) road for algae fuelEarlier this week algae fuel startup Sapphire Energy announced that it’s in the process of raising a whopping $144 million from private investors, which will be used to build out its first commercial demonstration algae farm in New Mexico. That farm could be able to produce 1.5 million gallons of Sapphire’s green crude per year by 2014, says Sapphire’s VP of Corporate Affairs, Tim Zenk.
That might sound impressive, but it’s a far cry from the company’s previous projections. Back in 2009, Sapphire was hoping its algae farm would be able to produce 1 million gallons of green crude per year by 2011, followed by 100 million gallons per year by 2018, and 1 billion gallons per year by 2025. When Sapphire made those projections, the sheer volume was so much more than any of their competitors were putting out there, that I asked if Sapphire was going to be “the gorilla of algae fuel?“
Well, turns out, nope, at least not yet, but they are still out in front of — or on par with — much of the rest of the algae fuel industry. The algae fuel sector is just taking a really long time to scale and reach anywhere close to being economic with gas and diesel.
In 2010, Pike Research predicted that by 2020, the algae biofuel industry would only likely be able to produce about 61 million gallons per year globally and Pike estimated that the world wouldn’t see its first commercial algae plant with capacity of at least 1 million gallons per year until 2014 at the earliest (more likely 2016).
Contrast that 1 million gallons per year — which Sapphire’s Zenk notes is “a commercial demonstration plant, and on the energy scale is small” — with the amount of fuel that the U.S. alone consumes every year: nearly 138 billion gallons of gasoline in 2009 were consumed in the U.S. according to the U.S. Energy Information Administration.
If it’s taking so long, why even bother? Well, algae is one of the most promising fuel stocks partly because it can produce 2-20 times more oil per acre than other energy crops, and it can live in freshwater, seawater and wastewater. In theory, it’s a perfect fit for a biofuel.
gigaom
It seems like a reasonable amount to spend on R&D considering the value a substitute for crude oil will have post peak.
