Renewable Fuels to take over in 2013
By: Alan Anderson
It has been a long hard month of research, secret and missed calls and still finding time to do my day job. But finally I got people to give me a small insight of what is really happening out in the biofuels secret/covert world. Just a few weeks ago I wrote on what I saw as a declining interest in Renewable Fuels. Well one day not long after that email went out I got a call from a high level executive at RAND Corporation. Do to the sensitive nature of all the information this source gave me and the other persons they put me in contact with I must keep all their names and titles confidential till a later date.
The RAND Corp. published a paper back on June, 19th 2012 on U.S. Military's Role with Petroleum Is to Assure Security. In the study James Bartis, a RAND senior policy researcher said "While the Department of Defense is one of the world's largest fuel users, its consumption of about 340,000 barrels per day is a small fraction—less than one-half of one percent—of global petroleum demand," "Considering that the United States produces more than 8 million barrels of oil per day domestically, there is no credible scenario in which the U.S. military would be unable to access the supplies of fuel it needs to defend the nation." The report emphasizes that future oil prices cannot be predicted. "Too often military planners are afflicted with petroleum anxiety," Bartis said. "They think prices are heading in only one direction: up. But history teaches us otherwise." Bartis said that although the military will have access to the wholesale fuel supplies that it needs, the purchase price could be uncomfortably high. The study finds that as fuel consumers, the military services have only one effective option to deal with high petroleum prices: use less fuel. This can be done by purchasing more energy-efficient equipment, by adopting maneuver schemes that are more energy efficient and, in the short term, by implementing other energy conservation measures. The studies find that alternative liquid fuels do not offer the Department of Defense a way to appreciably reduce fuel costs. "Pending a major technical breakthrough, renewable jet and marine fuels will continue to be far more expensive than petroleum-based fuels," Bartis said.
My source says that the pending technical breakthroughs have already happened. He then put me in contact with another secret source at the DoD who told me that well known engineering company in the U.K. (Ricardo) was working with the US Army to build improved new troop carriers. The goal is "to improve military vehicle technology, reduce fuel consumption on the battlefield and reduce the nation's dependence on oil” The DoD official said “This was going to be rework of major proportions, top to bottom of the vehicles.” “Engines will be tested with all forms biofuels known to man, and then to new armor and complete body and internal systems redesign.”
Being a rookie interviewer I failed to ask about budget requirements, but being a good source they had all the information ready for me on the spot. According to the official, this budget money is in his words “Old Money”, “money that was budgeted over ten years ago but was never used till recently and only because the current White House ordered the DoD to find new ways to save money and reduce oil consumption. Ok here is where things got interesting, I have to admit I was not doing such a good job interviewing this guy. He asked me if I was only interested in what he knew about military programs to use more renewable fuels or did I want to know everything. Well I jumped on that question. I said, “Tell me what you want and can about anything you know.”
He began to tell me the DOE and the DoD is working on “Energy Farms.” Energy Farms are plots where more than three (3) forms of energy are being produced to centralized generation of wind, solar and many forms of liquid biofuels to support government facilities including military bases and federal complexes. So let’s use Mountain Home AFB in Idaho. The footprint of the AFB is very small compared to the land that it controls around the airfield. This land could be used for placing low profile wind turbines and solar panels and have over 1000 acres to grow Energy Crops to produce biofuels for powering it vehicles both diesel and non-petro. The base could be self powered and have enough excess to sell to local community power grid. The fuels side of things depends mostly on the land and sources of Energy Crops. My source says that if we could fit at least 50% of US bases with such programs we could logistically power the rest of nearby bases without relying on fossil fuel sources of prices. The dollar cost and savings are still being explored and worked out but the DoD’s initial numbers show a ten year payoff of project and then positive revenue after that.
One other concern the DoD is exploring is vendors that can exclusively supply biofuels for specific applications with guarantee of prices for 5, 10 even 15 year periods so to lock down operation costs for stable ops planning. So let’s say ABC refinery in Fresno, CA. is making ethanol and biodiesel they can submit a proposal to the DoD that they will make and sell 10mm gallons of both for a set price for 5-15yrs. The biggest difference of this program compared to the way it works now is the length of contract and the set price with exclusive refining.
So after hearing all these ideas and programs in the pipeline in the government sector it leads me to believe that at least the government is serious about renewable energy and cost cutting costs. To me this sounds like a game changer for all of us in the renewable world and a even better deal for the public. As you can tell my spirits are back to full throttle and ready to turn and burn. We all know Congress and the folks in Washington who sign the checks and bills have say in most of what become reality but with the dying oil business things will need to get done soon.
I will comprise more information for the near future as I get more access to the right people. Still tuned and don’t give up hope, we are making a difference and the wheels are turning the right way now. We need to get the Open Fuel Standard squared away and get better organized on selling renewable fuels vs. fossil carbon fuel.