Petroleum refiners, BIO respond to Navy biofuels initiatives

By Erin Voegele | July 10, 2012

Representatives of the petroleum industry are weighing in on the U.S. Department of Defense’s plans to increase the use of biofuels. Charles T. Drevna, president of the American Fuel & Petrochemical Manufacturers, has spoken out alleging that such policies are an example of the government picking market winners and losers rather than taking steps to enhance America’s energy security. The July 9 statement was made following an announcement by the DOD, USDA and U.S. DOE on July 2 that more than $130 million in new funding opportunities is being made available to support the development of the advanced drop-in biofuels industry.

“This initiative is another Obama administration green fuel gimmick to make headlines, but it does nothing to address national security,” Drevna said. “If the administration truly wants to enhance U.S. energy security, it would unleash more of our domestic oil resources and take steps to ensure a regulatory environment that allows American refiners to stay open and competitive in the global marketplace. Unfortunately, this latest announcement is another example of the administration’s all-of-the-above-but-none-of-the-below energy policy. At a time when tensions continue to rise in the Middle East, this moves our country down a potentially dangerous and unsecure path.”

However, Secretary of the Navy Ray Mabus has long stressed that biofuels do, in fact, represents a path towards greater energy security in the U.S. On July 10, DOD Live posted a video of remarks Mabus made about the Great Green Fleet at Boston Navy week. In the video, Mabus noted that, “Even if we could get all the oil and gas we needed in America, it’s still a global commodity.” That can lead to significant price shocks when global events, such as the Libyan civil war, transpire. “Every time the price of a barrel of oil goes up $1, it costs the Navy $31 million in additional fuel costs,” Mabus said. “So, we’ve got to correct that, and we are moving to do so.”

The Biotechnology Industry Organization released a statement on July 10 responding to petroleum refiner’s criticism of the Navy’s advanced biofuel initiatives. “Achieving energy security is critical to national security and military readiness, and the domestic advanced biofuel industry is attempting to do its part to help the U.S. military reach its goals,” said Brent Erickson, executive vice president of BIO’s Industrial and Environmental Section.  “It is clear that our military cannot achieve energy security by continuing to depend on foreign oil. Liquid fuels are needed to fly planes and sail ships, so biofuels are critical components of military energy security. U.S. taxpayers spend $80 billion each year for the U.S. military to defend international oil shipping lanes in the Persian Gulf and elsewhere. At the same time, the United States is importing nearly 2 million barrels of oil from the Persian Gulf each and every day. U.S. consumers are essentially paying twice for each barrel of our continued dependence on foreign oil.”

Erickson added that access to fuel is only one aspect of energy security. Price is another. “No matter how much oil is produced in the United States and by our neighbors and allies, OPEC will continue to set world oil prices and exercise control over the affordability of fuel,” Erickson said. “Do we really want to wait until the price of petroleum fuels has reached $26 per gallon to begin to look for alternatives?”