Print 59 comment(s) - last by bah12.. on Dec 9 at 9:20 AM

Fuel is still nearly five times as expensive as traditional fuel

For better or worse the U.S. military is trying to fight an "army of one" campaign to switch its massive fuel consumption base to domestic biofuels, safeguarding itself from foreign volatility.  And despite some small bills to the U.S. taxpayers the push appears to be working.

Biofuels work pretty much like any production industry -- you produce more, and price per unit drops.  Back in October 2010 the Navy purchased 20,055 gallons of algae biofuel at a whopping cost of $424/gallon.  At the time that was one of the biggest U.S. purchases of a (non-corn ethanol) biofuel to date.

Fast-forward a year and the Navy is back at it.  It's spent a reported $12M USD to get 450,000 gallons of biofuel.  The bad news?  The fuel cost works out to around $26.67 per gallon -- around 6 to 8 times as much as traditional gas.  The good news?  The cost per gallon has plunged by a jaw-dropping factor of 15.9.

Algae Biofuels
A peek at the algae biofuels production process. [Image Source: Solix Biofuels]

While the incredible cost reduction is unlikely to continue at its current pace, the purchase validates something some national security and environmental advocates have been emphasizing all along -- if you produce more, costs will drop.

The latest fuel purchase is a mixture of repurposed cooking oil ("yellow grease") from Tyson Foods, Inc. (TSN) and algae-based oils from Solazyme, Inc. (SZYM).  Tyson is current partnered with a refining company named Syntroleum Corp. (SYNM) in a joint venture called Dynamic Fuels.  The Navy's contract is with Dynamic Fuels, who has signed a subcontract with Solazyme to buy its algal oils for refining, to help fill the large order.

Navy Secretary Ray Mabus lauded the purchase as helping to grow the domestic biofuels market.  The fuel will be used to help power the Navy's "green" Carrier Strike Group during exercises in the Pacific Ocean next summer.

Carrier Strike Group
The U.S. Navy's "green" Carrier Strike Group [Image Source: USN]

The Navy, which uses 80,000 barrels of oil a day (3.36M gallons/day), has made the amibitious pledge of getting 50 percent if its fuel from fossil fuel alternatives by 2020.  At current demand levels, that would work out to around 613M gallons of biofuel a year.

It's not alone in that objective.  The U.S. Air Force now has 98 percent of its aircraft ready to run on a biofuel blend (though the allowed amount of biofuel in the blend is application-dependent).

The U.S. Armed Forces accounts for about 2 percent of total U.S. fuel consumption.  Of last year's approximately 4.62 billion gallon, $15B USD fuel budget, 75 percent was used in overseas operations, while 25 percent was utilized at home.

Source: Defense News

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RE: A Real Green Strike Force
By sviola on 12/7/2011 12:01:54 PM , Rating: 2
Why, exactly, is the military trying to be "green" again? Oh, so the liberals can continue demonizing the armed forces for "wasting taxpayer dollars." That's right.

In the article it says that to diminish the dependancy on foreign fuels, which make sense, considering most of the oil around the world are in countries hostile (or somewhat hostile) to the US, like Iran, Venezuela and Russia.

RE: A Real Green Strike Force
By lightfoot on 12/7/2011 12:13:48 PM , Rating: 2
If you honestly think that this is a national security issue you are seriously delusional.

If a true national security event cut us off from foreign sources of fuel, we would tap our own sources in a heartbeat and ration the civilian use of fuels if necessary. We've even had the technology to create synthetic fuels from coal since World War II. This isn't a fuel issue.

This is purely political and has NOTHING to do with "energy security."

RE: A Real Green Strike Force
By TSS on 12/8/2011 3:52:09 AM , Rating: 2
It's you who is delusional, and quite so. The militairy is the only place biofuels make sense.

Wars are won and lost by logistics. Alexander the great conquered so much because he kept his troops close to the sea and his supply ships. Stalingrad was lost by the germans because their armies where cut off from supplies. Hitler made the grave mistake of going for moscow first, if he had pushed south first and captured the oil fields right off the bat the war would've been entirely different. Moscow would've fallen the next year. No sense in producing that many T-34's if you cannot fuel them.

If we imagine for a second the US still had a soviet union sized enemy willing to attack you at this moment, i'd estimate your domestic oil industry can be killed off in less then 10 hours by a coordinated pearl harborish strike. How to do it is simple: Attack Refineries.

The US hasn't built new refineries in years. Most refineries that are built are concentrated in the same areas. First step is disabling all refineries, by air land and sea. Then, at the same time, attack US petrol reserves. You might only have a month's worth in current reserves, but if rationed like you say that can be extended for quite some time. However, all that oil needs space, usually in tanks stored close to eachother. Blowing them up shouldn't be hard.

Meanwhile move a navy up the gulf of mexico and shoot the oil rigs. Keep the navy in place and execute an oil embargo. Supply by land isn't nearly enough if supply by sea is cut off. While you'd need to embargo the entire coastline on both sides, considering the current infrastructure and concentration of that infrastructure a small force in the gulf will have the best effect. You'll need the rest of your navy to deal with US carriers anyway.

And, like pearl harbor, Total suprise can be achieved since america is not used to attacks on domestic soil. Terrorist attacks, sure. But an actual invasion or act of war? pearl harbor is too long ago for that. After about 10-12 hours the US should have enough supply left to run at full force for about 10-12 days, or keep the militairy running for another 2 months. However due to the element of suprise and the unreadyness of the US as a whole for such an attack, mobilizing the remaining reserves as well as insituting rations will take so long, by the time it's actually done you have about a weeks worth of fuel for the army.

If there ever is and was a national security issue it's the supply of whatever it is your armed forces run on. You're a damned fool if you think living in the 21st century has somehow magically changed that.

RE: A Real Green Strike Force
By lightfoot on 12/8/2011 4:55:56 PM , Rating: 2
Are you honestly saying that this biofuel is either more readily available than crude oil, or that it's manufacturing plants are less complex or located in more diverse locations than oil refineries?

Even if we increased biofuel production a thousand fold we would still have FAR more oil generation capacity than we would have biofuel capacity. Your argument is completely meaningless for the exact reasons that you stated. Wars are won due to logistics. Paying over five times the cost for fuel is logistically impossible for a sustained war effort.

All your arguements apply a hundred fold to biofuel plants, depots and infrastructure. ALL of the oil infrastructure would have to be DUPLICATED for biofuels just to get your biofuel system to EQUAL where we already are with fossil fuels.

It is far easier to tap our PROVEN oil fields and continue operating our military until other sources are secured.

Biofuels change nothing, they simply can not scale up fast enough to be of any significance at this time, and again buying fuel at inflated costs is not the same as researching how to MAKE that fuel at areasonable price.

More research is needed and the costs have to fall significantly further. Only then will biofuels become a viable option to fossil fuels - and only then because you will have the full might of the private sector assisting in the creation of the needed infrastructure.

RE: A Real Green Strike Force
By bah12 on 12/7/2011 12:54:50 PM , Rating: 2
In the article it says that to diminish the dependancy on foreign fuels, which make sense, considering most of the oil around the world are in countries hostile (or somewhat hostile) to the US, like Iran, Venezuela and Russia.
Think you are misrepresenting facts here. Don't remember the source, but I heard the % of oil purchased from hostile nations was only abut 5-10% certainly not "most".

Getting off of oil is a pipe dream (pun intended), but we do have a legitimate chance of at least no longer buying it from hostile nations (read primarily OPEC). Funny thing, is that as soon as we ban it's use I'd bet good money those nations become FAR less hostile.

RE: A Real Green Strike Force
By bah12 on 12/7/2011 1:20:37 PM , Rating: 2
Aww found a source.

So you were correct if you consider Saudi and Russia hostile, and certainly there is some concern there. Personally Venezuela, Nigeria, and Columbia are the ones I'd like to not see on the list. To some extent Brazil as well. Interestingly Iran doesn't even make the list.

Either way I think there is a good opportunity with natural gas, and bio-fuels to quit funding countries that clearly hate us.

RE: A Real Green Strike Force
By ekv on 12/7/2011 2:26:41 PM , Rating: 2
Either way I think there is a good opportunity ... to quit funding countries that clearly hate us.
Especially if we put ANWR on line. And I'm not arguing against continued development of bio-fuels. Though I would argue that simply slapping a "green" label on a bio-fuel and calling it superior is incurably stupid.

RE: A Real Green Strike Force
By lightfoot on 12/7/2011 3:23:29 PM , Rating: 2
Personally Venezuela, Nigeria, and Columbia are the ones I'd like to not see on the list. To some extent Brazil as well. Interestingly Iran doesn't even make the list.

It doesn't matter if it is on the list or not. Oil is traded on the global market as a commodity. If due to supply and demand we drive up the price of Canadian or Mexican oil we are also driving up the price of Iranian and Columbian oil. So long as ANYONE is willing to buy oil from these so called "hostile" nations, they will continue to sell it at a profit.

Biofuels can not even begin to move the needle so long as nations like China and India continue increasing their demand for oil.

RE: A Real Green Strike Force
By bah12 on 12/7/2011 3:54:00 PM , Rating: 2
Somewhat true, but losing your #1 customer is never a good thing. I'm not suggesting we drive up the cost of our other sources (as stated that would't help us), rather develop our own sources in house.

If we leverage our own natural gas and oil we can very easily move the needle. I think you underestimate our own supply if you think otherwise. All it takes is a quick look at the State's economies that have oil field reserves, to see that we have plenty of supply. It just wasn't wise to pillage our own supply at $1/gallon. However at $3+ it makes much more sense, combined that with the cheaper labor force due to declining economy and you have a ripe position for us to become much more oil independent (not completely but we can certainly choose our sources easier). Slap an import tariff on all goods form said nations. If anything supply and demand would dictate that it would drive the price of oil down not up.

RE: A Real Green Strike Force
By Reclaimer77 on 12/7/2011 7:21:27 PM , Rating: 2
Our #1 exporter of oil to the U.S, by a huge margin, is Canada. Last time I checked, they don't "hate" us or regard America as a hostile nation.

RE: A Real Green Strike Force
By bah12 on 12/9/2011 9:20:08 AM , Rating: 2
Think you missed my point because yours was the same. My point was that the majority of oil imports come from nations we consider quite friendly. We don't need to be 100% domestic oil, rather only <20% or so. This is not some far fetched reality, we could do it.

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