Letter to Senate Armed Services Committee, Pew Calls on Senate to Support Alternative Fuels

On behalf of the Pew Project on National Security, Energy and Climate, I am writing to urge you to support the Department of Defense's (DOD) efforts to accelerate production of American-made, advanced, “drop-in” biofuels for use in military jets, ships, and vehicles. Advanced biofuels can help power our military, address security of supply, mitigate price volatility, diversify military fuel supplies and enhance U.S. national security.

Last year, the Department of the Navy (DON) entered into a Memorandum of Understanding (MOU) with the U.S. Departments of Agriculture and Energy to advance the commercialization of U.S. advanced “drop-in” aviation and marine biofuels to help power military and commercial transportation. Under the terms of the MOU, $170 million would be provided by each participating federal agency and would be matched or exceeded by private sector investment.

The MOU notes that the United States spends more than $300 billion on imported foreign crude oil each year and that domestically produced advanced biofuels “provide a secure alternative that reduces the risks associated with petroleum dependence.” The partnership between the agencies and industry will work to reduce U.S. reliance on imports and create jobs while positioning American companies and farmers to be global leaders in advanced biofuel production.

Additionally, DOD views this effort as a way to reduce their long-term fuel costs. DOD's overall energy budget in 2012 was $16 billion with $11 billion for fuel. In fiscal years 2011 and 2012, DOD accrued $5.6 billion in unanticipated fuel costs (not anticipated or budgeted) for military operations and maintenance. These costs have a negative impact on DOD's budget.

Meanwhile, U.S. advanced biofuel producers have made rapid progress toward cost-competitiveness. Per gallon cost of test quantities of advanced biofuels under Navy contracts has declined more than 90 percent over the past two years and will continue to decline as these technologies scale to commercial production. Bloomberg New Energy Finance, the premiere clean energy data and analysis firm, forecasts that advanced biofuels will be cost competitive by 2018. A key factor in that forecast is DOD's continued commitment to reduce use of foreign oil and increase use of American advanced biofuels. Those efforts can provide more certainty for military fuel purchasers and therefore reduce the Department's operational cost overruns.

Commercial airlines also see the promise of advanced biofuels to reduce costs and avoid oil price shocks. Fuel represents the largest expenditure for airlines. In November 2011, Continental Airlines Flight 1403 was the first commercial passenger flight in the United States to use advanced biofuels, and Alaska Airlines also used blends for a domestic flight that month. Other carriers, such as KLM Royal Dutch Airlines, Finnair, and Thomson Airways, are using similar jet fuel products. In its 2012 report, Farm to Fly, the U.S.D.A. along with Airlines for America and Boeing Company stated, “the aviation-fuel user community is pulling demand for aviation biofuels.”

Congress has the opportunity to continue its tradition of working with DOD to strengthen security by supporting the effort undertaken by American farmers, industry, innovators and the military to tackle production and cost barriers to help diversify the military and national fuel supply. I look forward to working with Congress on these and other DOD energy policy priorities, and urge you to support the MOU. I can be reached at pcuttino@pewtrusts.org or Geoff Brown, legislative director, can be reached at gbrown@pewtrusts.org.

Sincerely,

Phyllis Cuttino
Director, Pew Project on National Security, Energy and Climate