Controversial biofuels amendment could have wide-ranging impacts, experts say

Source: Annie Snider, E&E reporter • Posted: Wednesday, August 15, 2012

Military leaders are raising the alarm that a congressional effort aimed at reining in the Pentagon’s biofuels program could hamstring their ability to get fuels of all sorts — including those that improve performance on the battlefield.

The concern is centered on an amendment that was added to the 2013 defense authorization bill during a Senate Armed Services Committee markup in May. The provision, which mirrors one passed by the House earlier that month, would block the Defense Department from purchasing alternative fuels that are more expensive than their fossil counterparts except in “limited quantities” for certification purposes.

But military brass and civilian Pentagon officials say that as it is currently written, the provision could have a much wider impact.

“Recent provisions passed by [the House Armed Services Committee] and [the Senate Armed Services Committee] are overly broad and have the potential to restrict investments beyond biofuels that would address tactical and operational needs for our military forces,” said Sharon Burke, assistant secretary of Defense for operational energy plans and programs, in an email to Greenwire. “They would make price the sole factor in determining if DOD could use an alternative fuel, without any consideration of military capability, mission, or circumstances.”

Vice Adm. Philip Cullom, the Navy’s top officer for energy, pointed to a high-performance hydrogen fuel being developed to power drones over Afghanistan as a case in point.

“Those hydrogen fuels are more expensive than petroleum and probably will be forever, yet a[n] [unmanned aerial vehicle] on a hydrogen fuel has significantly greater endurance and significantly greater range,” Cullom said. “I call that combat capability, [but] we won’t able to be able to use that because it’s more than petroleum.”

Officials say the provision could also stymie efforts to produce energy from waste at battlefield bases — a project that, if successful, could take dangerous and expensive fuel convoys off the road in Afghanistan.

There is even concern that the amendment could block the military from entering into contracts for regular old petroleum fuels that are delivered to remote locations around the world. In Afghanistan, those contracts are more expensive than the going market rate for fuel because the supplier takes on the risks and responsibilities of getting the product to points on the battlefield.

“It’s not a cookie-cutter approach,” said Mark Iden, director of supplier operations for the agency that buys fuel for the military. “It’s not a one-size-fits-all. We don’t buy all fuel everywhere in the world for $3 a gallon. Everywhere is a little bit different.”

The complexity of the military’s fuel-buying operation means that a seemingly simple attempt to prevent the department from spending more than is necessary on energy could cause second- and third-order effects, said Kevin Geiss, the Air Force’s point man on energy.

“‘Cost-competitive’ doesn’t mean that you’ve got a bright line that you can’t even eke across a penny,” he said. “Potentially putting constraints that would restrict us even in the way we do business today I think is what we’re saying we need to be careful about.”

But supporters of the provision say these concerns are just “red herrings” thrown up by officials who are pushing a green agenda at the Pentagon. Aides to a Republican member of the Senate Armed Services Committee said that Cullom and Chief Naval Officer Adm. Jonathan Greenert raised no concerns about the legislation’s affecting procurement of fuels other than biofuels during a closed-door briefing with congressional staff last month.

One aide said that there has been some discussion about tweaking the amendment language when the bill comes to the Senate floor and emphasized that the committee would take swift action if there were any indication that the provision would cause unintended problems for the military.

“If this language legitimately hurts us operationally, the last thing the [Senate Armed Services Committee] would want to do is stand in the way of the Armed Forces being able to get what they need,” he said.

Indeed, if the provision is passed in the final bill, it would likely be up to the Pentagon itself to determine how to implement the legislative language.

Impacts on biofuels

Despite the broader concerns, the Obama administration is not hiding its frustrations with how the disputed provision would affect its military biofuels efforts.

When the House passed its bill this spring, the White House specifically called out the energy provisions in its veto threat. In a statement, the administration said the provisions “would affect DOD’s ability to procure alternative fuels and would further increase American reliance on fossil fuels, thereby contributing to geopolitical instability and endangering our interests abroad.”

Officials are especially concerned about the phrase “limited quantities,” since the amendment includes no definition. A second Republican aide said the language is intended to restrict DOD to research and development purchases. The question of what qualifies as research, however, has proven controversial.

The recent wave of congressional scrutiny was in fact sparked by the Navy’s purchase of 450,000 gallons of biofuels at nearly $27 a gallon for a demonstration of its “Great Green Fleet” during exercises off the coast of Hawaii last month (Greenwire, July 19).

The Navy defined the demonstration as part of its alternative fuels research program, noting that it was the first time that a 50-50 blend of biofuels had been run through an entire operational system and that staff members are collecting feedback from everybody who participated in the exercise.

But opponents say the event was geared at media attention, not testing, and point to the fact that the funds to buy the fuel came out of the operations and maintenance budget line rather than research and development.

“This is about readiness,” the Republican aide said. “The defense budget is getting squeezed from the top, and then they want to spend $12 million on an exercise using a biofuel blend that they already know works. … Limited defense funds must be used to ensure military readiness — training and equipping our servicemen and women.”

Navy officials have said they will not purchase operational quantities of fuel until they are cost-competitive with petroleum, but they contend that the contested amendment, as well as one that would block the Navy’s portion of an interagency effort to invest $510 million in building commercial-scale biofuel refineries, would prevent them from taking actions that would help bring down the cost of biofuels.

“It ties our hands of our ability to eventually be able to get to the use of different kinds of fuels,” said Cullom, the Navy officer.

Sens. Mark Udall (D-Colo.), Patty Murray (D-Wash.) and Susan Collins (R-Maine) have mounted a campaign to vote down the two biofuels provisions when the bill comes to the floor.