Military investments in biofuels will create big payback in jobs and economic growth

By Ross Macfarlane and Paul Andersson
Climate Solutions

Our friends at Environmental Entrepreneurs (E2) released a new study Wednesday showing the huge benefits that will come from continued military investments in biofuels to limit their dependence on petroleum. The study shows that meeting the Department of Defense’s (DoD’s) aggressive biofuel targets will directly generate between $9.6 and $19.8 billion of economic activity and create 14,000-17,000 new jobs by 2020. If measured on a job-year basis, the total number of jobs created would be more than twice that amount.

E2 is non-partisan national community of 850 business leaders whose mission is to provide a platform for an independent business voice to promote environmentally sustainable economic growth. Climate Solutions has partnered with E2 on several events focused on military leadership in clean technology, including Mission Critical, an event last spring featuring Washington Governor elect Jay Inslee, Representative Adam Smith and several active and retired military leaders.  Defense Department investments in biofuels are also a critical strategy for the efforts to build a viable industry to create sustainable, low-carbon jet fuels to power the future of flight. Our Sustainable Aviation Fuels Northwest Report identified military demand as a critical factor for  developing a complete supply chain for renewable fuels.

The E2 report looks at the entire value chain of the nascent biofuels industry in response to the military’s strategic focus on developing renewable fuels.  In March of 2011, President Obama outlined his “Blueprint for a Secure Energy Future,” directing the USDA, DOE, and the Navy to work together to establish a domestic industry capable of producing viable biofuel substitutes.  The Navy and Air Force have taken a firm stance in support of clean fuel initiatives, with goals to replace half their consumption of petroleum-based fuels with alternatives by 2016 and 2020, respectively.

During the Navy’s historic 2012 Pacific Rim demonstration of their Great Green Fleet, Navy Secretary Ray Mabus said, “If you look at the reasons we’re doing it, we’re not doing it to be faddish, we’re not doing it to be green, we’re not doing it for any other reason except it takes care of a military vulnerability that we have.”  Making statements from the hanger of the USS Nimitz, Mabus also noted that the Navy got stuck with a billion-dollar bill in May, 2012 because of rising oil prices. “We simply have to figure out a way to get American made homegrown fuel that is stable in price, that is competitive with oil that we can use to compete with oil. If we don’t we’re still too vulnerable.”

To support the development of advanced biofuels compatible with the military’s infrastructure, the Navy, DOE and USDA have committed to jointly invest $510 million over a three-year period. Military investment has been critical to the commercialization of many major industries and inventions over the years, including microchips, the Internet, and GPS technology—all of which received significant military R&D before benefitting society and the private sector to the degree they do today.  The E2 report identifies the ways in which a military investment in advanced biofuels will provide payoffs just the same. 

In addition to the creation of thousands of jobs and billions of dollars in new revenue by 2020, the report concludes:

• Of these jobs, 3,000-5,000 will be permanent rural agricultural jobs from biomass production, and about 1,200 will be in biorefinery operation. An additional 10,000 jobs will be created from biorefinery construction.

• These economic and job impacts will be broadly distributed geographically, with the greatest benefits to states that create the strongest incentives for biorefineries.

• In order to meet the military’s cost and volume targets, advanced biofuel companies are leveraging $3.4 billion of private capital invested since 2007 to build new commercial facilities.

• Military demand is helping to shape the early market and scale the advanced biofuel industry.
  
  

 The current annual military spend for fossil fuels is estimated between $17 and 18 billion, with prices per gallon varying from $3.15 (unburdened) to $400 (fully burdened, requiring flight in to troops).  Military leaders agree that thousands of lives have been lost defending fuel supply lines exclusively, and key figureheads have proclaimed that lives and money would inherently be saved through the development of more advanced fueling options.

Advanced biofuels, those derived from various types of biomass and not necessarily food crops, have many proven technologies for refining, two of which have received ASTM approval for aviation uses.  Thousands of commercial and military flights have taken place over the past two years using a 50% biofuel blend and, recently, the first 100% biofuel flight took place in Canada.  Emissions from advanced aviation biofuels are proven to reduce greenhouse gas emissions by 50-70% throughout their lifecycle over fossil fuels.