Green Room

Navy buys biofuel for $16 a gallon

posted at 12:52 am on December 10, 2011 by

This is going to help the Defense Department weather looming budget cuts, for sure.  Teaming up with the Department of Agriculture (which has a cheery Rotary Club ring to it), the Navy has purchased 450,000 gallons of biofuel for about $16 a gallon, or about 4 times the price of its standard marine fuel, JP-5, which has been going for under $4 a gallon.

You won’t be surprised to learn that a member of Obama’s presidential transition team, T. J. Glauthier, is a “strategic advisor” at Solazyme, the California company that is selling a portion of the biofuel to the Navy.  Glauthier worked – shock, shock – on the energy-sector portion of the 2009 stimulus bill.

The Navy sale isn’t Solazyme’s first trip to the public trough, of course.  The company got a $21.8 million grant from the 2009 stimulus package.

Solazyme’s partner in the biofuel sale is Dynamic Fuels, a Louisiana company owned jointly by Tyson Foods and Tulsa-based Syntroleum.  Tyson and Syntroleum are distinguished by having profitable lines of business that do not rely on government grants to unprofitable “green” projects.  This does not make their biofuel product price-competitive with fossil fuels, however.  (They were induced to develop biofuel manufacturing processes by a combination of subsidies and tax breaks.)

The Dynamic Fuels plant was opened for business in Geismar, LA in 2010, becoming by far the largest biofuels plant in North America – and reportedly, in combination with a plant in Finland, a producer of 94% of the world’s biofuels.  This is great boosterism stuff, but the biofuels produced by Dynamic Fuels are still considerably more expensive than the fossil-fuel alternative.  Dynamic Fuels has begun supplying aviation biofuel to KLM, the Dutch flag carrier, but of course, the use of more-expensive biofuels by commercial carriers has to be subsidized by governments.

If governments stopped subsidizing biofuels, their artificial “profitability” would disappear overnight.  Price-wise, they can’t compete with fossil fuels.  The day may come when they can, but subsidizing them while they don’t is not a method with any record of success for encouraging price efficiency.  What it does instead is create languishing public dependencies and tremendous opportunities for cronyism, as demonstrated in the Solyndra scandal.

As the Institute for Energy Research article (top link) indicates, the US has enormous reserves of both conventional and unconventional oil and natural gas resources.  Opening them up for exploitation would, among other things, ensure that the US armed forces could buy cheaper fuel – cheaper than today’s prices – produced in the USA.  At a time when federal debt is spiraling and the Defense Department is facing budget cuts that are guaranteed to gut the fighting forces and render them ineffective, it seems to border on insane to eschew a ready, significantly cheaper alternative and require the armed services to quadruple what they pay for fuel as a proof of concept – apparently with the idea that the forces should buy more of the 4-times-as-expensive fuel.  This is, after all, our national security we’re talking about.

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

 

 

 

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Unbelievable!
This needs to be SCREAMED from every rooftop, on every station, in every “newspaper”, on every website.

This is nothing kess than straight up fraud, theft and corruption.

KMC1 on December 10, 2011 at 1:35 AM

the Navy has purchased 450,000 gallons of biofuel for about $16 a gallon, or about 4 times the price of its standard marine fuel, JP-5, which has been going for under $4 a gallon

I could kind of see doing that for research purposes, but that seems like an awful lot of fuel.

Count to 10 on December 10, 2011 at 10:46 AM

Let’s do some math: 450,000 gal x $12/gal = $5.4 million more than it would have cost to buy standard marine fuel. Even if we accept the presupposition that we are killing Gaia with our fossil fuels, I’m pretty sure that the number of trees you could plant with $5.4 million more than makes up for the environmental impact of burning fossil fuels instead of biofuels.

sadarj on December 10, 2011 at 12:20 PM

Does anyone beside me remember the $400 hammers and $750 toilet seats in the 1980s the DoD was buying? This seems all too familiar…with quite a bit of crony capitalism thrown in.

Difficultas_Est_Imperium on December 10, 2011 at 12:56 PM

Tammany Hall for the modern age.

garnkikaloid on December 10, 2011 at 1:24 PM

Sometimes I just want to bang my head against a wall reading krap like this! A few are making mega bucks soaking the taxpayers for all this stuff. Not to mention, they are using corn, you know that stuff people eat, for fuel. Oh well, I doubt anything will be done about this?
L

letget on December 10, 2011 at 1:42 PM

Wow. Thanks for this J.E.!

BTW, Doesn’t ethanol damage boat engines? Water gets into the lines and rusts them out and stuff like that? I know it kills small engines like lawn mowers/blowers…

Buy Danish on December 10, 2011 at 3:26 PM

IIRC the “$400 hammer” thing was a case of horrible accounting practices. They didn’t actually pay $400 for a hammer, but the documentation said they paid $400 for a $10 hammer, and $400 for a $1000 generator, etc…

I don’t remember what the rationale was, but I saw some of the published documents and everything on the list would be the same price.

They probably paid too much for the hammer, possibly a lot too much, but I don’t think it was $400.

I think they called it the “equal allocation method” of splitting item and support costs evenly among items on a list.

It was dumb, but not as dumb as “$400 hammer” makes it sound.

Merovign on December 10, 2011 at 4:01 PM

Probably more money in there for Obama ads next year

KOOLAID2 on December 10, 2011 at 4:03 PM

This post has been promoted to HotAir.com.

Comments have been closed on this post but the discussion continues here.

Jazz Shaw on December 11, 2011 at 6:00 PM

Consider that this fuel is made from pig fat as Tyson is a partner in the company.

What would muzzies do with pig fat fumes falling from the sky?

Kermit on December 11, 2011 at 1:07 PM