US Navy Pays $26 a Gallon For BioFuel
December 11, 2011, Submitted by: Ken Tweet
The departments of Agriculture and the Navy announced plans to buy 450,000 gallons of biofuel at a cost of about $26 per gallon, totaling $12 Million in what will be the largest federal purchase of biofuel in U.S. history.
This new purchase, at first, will cost $26 per gallon, or $1,092 per barrel. That biofuel will then be blended with an equal amount of fossil fuel, producing 900,000 gallons — and an effective price of about $15 per gallon for that 50/50 blend.
Bloomberg reports that the deal follows an August announcement by the Navy and the U.S. energy and agriculture departments to invest $510 Million to retrofit or build new biofuel processing plants.
The purchase has been authorized by an executive order by president Obama. The administration gave no indication why they’re not going through Congress.
The participating companies are Tyson foods, Syntroleum Corp, and Solazyme. Interestingly, a member of Obama’s presidential transition team, T. J. Glauthier, is a “strategic advisor” at Solazyme, one of the companies to benefit from the half-billion-dollar government investment.
Tyson Food is headquartered in Springdale, Arkansas, and is one of the world’s largest processors and marketers of chicken, beef and pork.
Syntroleum Corp (a publicly held US company who merged with SLH Corporation) together with Tyson, will construct the world’s first renewable synthetic fuels plant utilizing its technology and Tyson sourced agricultural feedstock.
Solazyme is headquartered in San Francisco and specializes in algae fuel.
Given the fact that the Unites States national debt is currently more than $15 Trillion, one wonders if paying $26 per gallon for fuel is a good idea right about now…
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IF, and that is a big fat IF, the government can get the price down into the single number dollar cost then it MIGHT be an addition to fuel energy needs in the future. It is nice to have some form of renewable energy source, but like other renewable forms of energy, it takes time to grow and manufacture and refine for use, even algae. There is a huge problem of daily use of energy now and will be tremendous in the future. It could be near imposssible to keep up with this usage, even with these OTHER measures of finding fuel to run everything. I also would like to know the ratio of energy used to energy produced for these bio fuels that would cost almost $400 to fill up the average car.
One other item of interest with bio fuels is the power that you get from them, as it is not as strong as carbon based fuels. I have been told by many mechanics that you just do not want to use Ethanol in your cars. If this bio fuel is so wonderful then why do you have to mix it with fossil fuel? It kind of reminds me of how these saloon owners water down their liquor to make it barely drinkable. Watering down gasoline with a 50/50 bio fuel kind of sounds like this, making fuel barely useable and not good for engines. Let them get the price way down and the energy efficiency way up for bio fuels and you might have something, otherwise it is a very hollow pipe dream.
Interesting article. Can you cite where you found this was being done under executive order? The linked Bloomberg article makes no mention of that. I’d like to learn more. Thx.
@Arkaden, quote: “The purchase is being authorized by an executive order under the Obama administration’s “we can’t wait” campaign.”
I read it here: Navy, Agriculture Departments to Purchase Biofuels For Fleets
Without exception every bio-fuel now being marketed or thought about has one purpose and one purpose only; that is to extract money from the government. Simple as that. Bio fuel is not and was never intended to be practical or reduce our dependence on fossil fuel. But to “sell” the dream and keep the fraud going it must make these claims. The price of bio fuel will come down as the subsidy goes up. We could get bio fuels below double digit tomorrow if we could just get the governments to pump in enough money and pass enough regulations.
Here is an interesting fact: All bio fuels require HUGE amounts of energy. This energy is usually from petroleum and some from natural gas. If a particular bio fuel were practical then why couldn’t the process be powered entirely by bio fuel? The simple answer is that all bio fuels require more energy into the process then it creates. Thus bio fuels are expensive and require subsidies and will never solve our energy problems.
Or read it from the source,
http://energy.gov/articles/president-obama-announces-major-initiative-spur-biofuels-industry-and-enhance-america-s
Now I know why Americans have been fattened up…
Forget those femacamp “ovens…”
Biofuel is PEOPLE!
Went over to the gas station today to put some higher octane gas in and it was mysteriously cheaper than the mid grade octane, found out why. 10% Ethanol is being now added to almost all fuel. The mid range octane was now the most expensive because it is alcohol free. Found out that our wonderful government is now forcing gas stations to have the 10% or so added to the real gasoline. That is except the mid range gas because recreational vechicles do not run well of any ethanol so they are allowing this to remain pure gas, alcohol free. I don’t see that much difference between an engine of a recreational vechicle and a common car. This is what the gas station told me, as it has signs on it that say 10% ethanol.
The person working there was also very upset because this new so called requirement by those greenies in Washington because it has driven up the price of corn so much that those in poor countries now cannot afford to purchase it and will starve. This probably won’t happen because the good’ol USof A that is already broke will sell the corn at a reduced rate and drive up the debt a little more, at a huge loss to those countries that are hungry. I hear this, and if it is true, it puzzles me at any logic other than the wonderful politicians want to look like they are doing something to solve the energy crisis. Maybe someone out there can dig into this and find out if it is true that the government as of last Saturday is now requiring fuel have some ethanol in it, or this gas station is not being truthful.
I don’t see the problem with this. I assume everyone here is PO aware, so why is it a surprise that the military would be first to utilize biofuels if only for a tactical reason?
This is still in the R&D phase, the type of fuel they’re looking to replace is about $2.30 a gallon. Hopefully the price gap can be closed and we can all benefit. Hopefully.
I am a chicken farmer for Tyson cant help but wonder what this could mean from my stand point.
@All; Woosa, woosa. Biofuel is something of a misnomer for the average person as they equate it to “ethanol”. While ethanol IS a biofuel, and pretty stupid, the biofuels the military is using are OIL (not petroleum) based, not alcohol. They generally use recycled cooking oil along with canola and rape seed oil to make a form of bio diesel/kerosene that is mixed with other additives, including benzene, to make jet/turbine fuel. We (the military) were tasked by the PTB in the gubment in the late 90s and early 00s, to tell them what we (the military) would do if oil was cut off and we had to make do with something else. Well, this is it. Version, well, it’s not even version 1.0, it is the Beta version. It will take a while to get the price down. It is only high because the fuel has to be mixed and comes in outside the normal petroleum supply chain. “Regular” biodiesel is only slightly more expensive than standard D-4 diesel that humvees and other military vehicles run on. Jet fuels on the other hand have certain additives along with being MIL-SPEC that make their costs higher. Not making excuses for them, just giving the explanation. As a retired, long-time member I’m glad we have the option. I can assure you that local commanders will have their budget bottom line on their minds and will use as little of this fuel as possible, because unlike the politicians they have someone to answer to about their budget. Survive well. Enjoy.