Is a Domestic Biofuel Industry Necessary for National Defense? Erick Castro Scott Bishop Brad Coleman Gary Blumberg Anthony Ripley

Biofuels Background Biofuels = fuels from recently processed biomass – Biomass (organic matter) referred to as feedstock Two primary types of biofuel: ethanol, biodiesel 1st Generation biofuel: carbohydrate-based 2nd Generation biofuel: cellulose-based 3rd Generation biofuel: microalgae/organisms

Congressional RFS mandate 15 Billion 4 Billion 16 Billion New growth industries

Proponents Independence from foreign oil sources – Drop-in replacement for oil – Reduce price of oil Cost projected to drop below current price of fuel Claims lower lifecycle carbon footprint Hedge against volatile fuel prices DOD should initiate investment Detractors Insignificant impact on fuel supply Currently more expensive Env. benefits in doubt – May increase CO2 levels – May consume more energy to produce than energy provided As a direct substitute, biofuel would be priced at market rate No increase in military capability – Same logistics as oil Biofuel Proponents/ Detractors

Biofuels won’t remove volatility

DOD Energy Use by Service DOD is the largest consumer of petroleum in the world – DOD should lead biofuel research USAF: 62M USN: 25.3M USA: 21M USMC: 4.7M Total: 113M* *2010 consumption

U.S. Petroleum Use DOD accounted for 1% of all U.S. energy consumption DOD accounted for 3.2% of U.S. petroleum use in FY2011 DOD accounted for 0.69% of world petro use in FY2011

Proportional Costs of Biofuel Department of the Navy has committed to spend over $200M to start a domestic biofuels industry OR Fund an additional 1,300 sailors. FY13 shipbuilding plan Joint High-Speed Vessel cost $189M R&D for energy saving technology

Opportunity Costs of Biofuel Paying more for biofuels reduces funds available for innovations which give the DOD an operational advantage and reduce dependence – Current innovations which provide a tactical advantage and reduce fuel consumption: Solar power tactical equipment Low consumption electronics Higher capacity batteries Insulated tactical shelters (tents)

Convoys are composed primarily of: – USMC: fuel & water are 70% logistic demand – Army: fuel & water are 80% logistic demand Costs to protect convoy: – Manpower diverted from tactical operations 50:1 casualty rate Decreased lethality Decreased endurance Petroleum: Logistical Vulnerability

Fuel saving technologies: – Ground Renewable Expeditionary Energy Network System (GREENS)GREENS – Solar Portable Alternative Comm Energy System (SPACES)SPACES – Rucksack Enhanced Portable Power System (REPPS)REPPS – Tactical Water Purification System (TWPS)TWPS – Lightweight Water Purification System (LWPS)LWPS – Hybrid solar-battery-generator Hybrid – DC air conditioners DC These examples reduce the logistical demand and provide an operational advantage. These are some of the opportunity costs for investing in drop-in replaceable fuels. Alternative technologies Biofuels do NOT reduce the logistical vulnerability

DPA Examples of Success – Micro chip – Nuclear Power – GPS – Secure Radio Tech. Common Beneficial Trait – Each provided a substantial operational advantage or capability to DOD – Nothing available to provide comparable results DOD Procurement Failures – $436 Hammer – $640 Toilet Seat – $7,600 Coffee Maker Common Detracting Trait – None provided a substantial operational advantage to DOD – Adequate* substitutes readily available *Adequacy infers that COTS items are “good enough” to accomplish the intended task. DOD and Defense Production Act

Conclusion and Recommendations Conclusion – Biofuels do not reduce the logistical vulnerability – Does not provide added value Higher performance Operational advantage Recommendation – Divert funds to develop technologies which reduce fuel and water demand on the battlefield – If biofuels are a congressional priority fund as R&D – Mandate policy to hedge against volatility

Questions? I pity the fool who is insecure “MR. T” DR.

Domestic Petroleum Sources IEA World Energy Outlook projects(2012 edition) – US becomes a net exporter of natural gas by 2020 – Almost self-sufficient in net energy by Energy independence met with no fed gov exp

Petroleum Use: The Bigger Picture U.S. Transportation data from Department of Transportation Bureau of Transportation Statistics

GREENS

REPPS & SPACES REPPS SPACES

TWPS/LWPS TWPS LWPS

Hybrid Power / DC Airconditioners

Making Ethanol (Corn) Dry Milling Process Source:

Making Ethanol (Corn) Wet Milling Process Source:

Making Ethanol (Cellulose) Source:

Making Biodiesel Source:

Making Biofuel (Algae) Source:

Fischer-Tropsch Process Source: RAND Report “Alternative Fuels for Military Applications”

Hydrotreated Renewable Oils Source: RAND Report “Alternative Fuels for Military Applications”