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Navy opens solicitation for 37 million gallons of biofuel

By Erin Voegele | June 11, 2014

The U.S. Department of the Navy is seeking at least 37 million gallon of drop-in biofuels as part of its F-76 marine diesel and JP-5 shipboard jet fuel supply in the upcoming Inland/East/Gulf Coast bulk fuels solicitation, which was released by the Defense Logistics Agency Energy on June 9. Bids are due July 9 with fuel deliveries beginning April 1, 2015.

The F-79 and JP-5 specifications allow up to 50 percent of finished fuel to consist of synthesized blend components derived from hydroprocessed esters and fatty acid or Fischer Tropsch conversion processes. Information released by the Navy notes that while only two biofuel pathways have been tested and qualified for use in Navy and Marine Corps aircraft, ships, vehicles and equipment, efforts are underway to adopt additional pathways.

A notice issued by the Navy specifies the biofuels can be blended at rates of 10-50 percent with conventional petroleum-based fuel and must meet all military fuel specification properties. The DLA will purchase the biofuel blends only if they are cost competitive with conventional fuels. According to the Navy, $27.2 million in Commodity Credit Corp. funds are available to defray any additional costs that may exist for fuels derived from domestic feedstocks on a USDA approved list. The CCC funding is capped at 71 cents per neat gallon of biofuel.

The official solicitation, published to the FedBizOpps.gov website indicates that to be eligible for CCC funds, the biofuel blend must contain 10-50 percent biofuel, as permitted by the JP-5 and F-76 specifications. The CCC funds will be allocated through the Bid Evaluation Model and will cover a portion of the offered price. According to the solicitation, an offerer will not be paid a price higher than its offered price.

Fuel offered under the solicitation must also comply with Section 526 of the Energy Security and Independence Act. That section of U.S. law requires that the lifecycle gas emissions of the alternative fuel must be equal to or less than petroleum-based fuel based on either the renewable fuel standard (RFS) or GREET Model.

According to the Navy, expanding military energy sources improves the reliability of the overall fuel supply and adds resilience against supply disruptions. It also gives the military more fuel options to maintain its readiness and defend the national security interests of the U.S.

Additional information on the solicitation can be found on the FedBizOpps.gov website under Solicitation Number SP060014R0061

 

 

2 Responses

  1. jim

    2014-06-11

    1

    The Navy did this a couple of years ago for one of their other big exercises, and they ended up paying almost 4 times as much per gallon as what the conventional fuel would have cost. The Government funded all the R&D for todays biofuels(commercial concerns realized long ago that there would not be a market for biofuels)and when biofuels became available the Government found out that nobody wanted it so the Government created a market for biofuels by mandating it as an additive to conventional fuels.

  2. Cliff Claven

    2014-07-02

    2

    I predicted zero credible proposals in response to this solicitaion a month ago and stand by that prediction. It is noteworthy that, as of June 18th, the solicitation has been changed to drop the hard floor of 10% biofuel blend and to drop the hard requirement for an EPA-approved D-coded feedstock and pathway. The solicitation also expressly allows the government and offeror to ignore GHG emissions from indirect land use change, which is a violation of ISO 14067, the global standard for calculating lifecycle emissions. The cutoff date for proposals has also been extended from June 6th to July 9th. The Navy and DLA Energy still have no clue what they are asking for with "drop-in" biofuels in terms of cost and complexity and climate impact. These fuels are not the raw sugars or lipids that green plants produce, nor the alcohols or esters that result from the first round of processing. They are true hydrocarbons that can only be made from organic plant material via "hydroprocessing," which is a complex, expensive, and hugely negative-energy balance series of chemical manipulations that begins with the application of massive amounts of hydrogen ironically derived from fossil fuel natural gas, destroying any pretense that the resulting fuel is clean, green, renewable, or climate friendly. The raw sugars and lipids must travel a tortuous path of fermentation, transesterification, hydrogenation, deoxygenation, oligomerization, cracking, isomerization, and fractionation to become a precise and consistent cocktail of paraffins, olefins, and aromatics that meets hundreds of precise specifications from color to conductivity to cold flow properties. Hydroprocessing also produces massive amounts of CO2 which must be counted as GHG emissions according to proper lifecycle evaluation, and which completely undermine the EISA Section 526 requirement to show reductions v. conventional fuels. After catching grief from Congress for spending $26.75/gal 450,000 gallons of biofuel for its "Great Green Strike Group" in 2012, The Navy and DOD have promised to only pay competitive prices for biofuels. So this DLA-Energy proposal has been carefully crafted to split the cost into a DOD portion which matches the going rate for petroleum fuel, and a separately-invoiced USDA portion which pays a premium out of a different pot of money (the Commodity Credit Corporation). This CCC "Biofuel Production Incentive" is just a gimmick to hide the higher price of biofuels, but the 71 cent/gal cap is ridiculously low and dooms the whole scheme anyway. The minimum contracted price per neat gallon of subsidized drop-in biofuels has been about $30/gallon. Gevo has stood fast at $59/gallon, Solazyme at $61/gal. Amyris admitted that even at $30/gallon, its fuel was sold at a considerable loss. According to DOE as of April 2014, corn ethanol is still running $1.17/gal more than gasoline when corrected for its lower energy content (http://www.afdc.energy.gov/publications/search/keyword/?q=alternative%20fuel%20price%20report), and soy biodiesel is 61 cent/gal more than petroleum diesel. So first generation, food-crop-based biofuels from our most productive crops, even after 9 years of massive subsidies and blending mandates, are still far more expensive than petroleum fuels and would consume the USDA CCC margin of 71 cent/gallon even before hydroprocessing. Liquid biofuels are an unsustainable thermodynamic black hole that consume far more energy than they deliver back. They cannot even match the poor energy balance/EROI of solid wood, and so cannot even power a pre-industrial civilization. The US Navy needs to wise up and ditch the anchor of biofuels that will only drag down the fleet and the nation to fiscal if not actual destruction. The rest of the military and the FAA and the EPA need to admit their biofuels follies as well. According to the EPA and the National Academy of Sciences, the RFS program to date has actually increased both polluting and GHG emissions compared to use of straight petroleum fuels, and has also increased the US death rate by 245 people per year. Is there are clearer example of failed policy?

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