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A report surfaced earlier today that the Republican-controlled House Armed Services Committee ordered the Department of Defense to cease using biofuels in its warships, planes and other vehicles. Ostensibly, the reason for the cease and desist was because biofuels are still considerably more expensive than “traditional fossil fuels.”
In a classic tirade, House Armed Services Seapower subcommittee member Randy Forbes took Navy Secretary Ray Mabus to task, slamming the service’s continued investment in alternative fuels, one of Mabus’ top priorities for the service.
“I understand that alternative fuels may help our guys in the field, but wouldn’t you agree that the thing they’d be more concerned about is having more ships, more planes, more prepositioned stocks,” Forbes said during the Friday hearing. “Shouldn’t we refocus our priorities and make those things our priorities instead of advancing a biofuels market?” Before Mabus could respond, the Virginia Republican took a clear shot at the secretary: “You’re not the secretary of the energy. You’re the secretary of the Navy.”
For his part, Mabus responded admirably in another committee hearing.
“It’s a false choice to say that we should concentrate on more ships versus a different kind of fuel. If we don’t get a different kind of fuel, if we don’t have a secure domestic supply of energy at an affordable price… the ships and the planes may not be able to be used because we can’t get the fuel,” Mabus told the Senate Subcommittee on Water and Power in March.
But considering that the GOP has recently offered the Department of Defense hundreds of millions of dollars more in the 2013 budget than it asked for, in a recession year, there has to be more to this. And there is.
The biofuels industry is still largely in the experimental phase. Many biofuels exist and to varying degrees, most are in fact still more expensive to develop, manufacture and distribute than traditional fossil fuels.
This is due in part to the long history of research and development that the fossil fuels industry has enjoyed, with considerable tax-free government assistance and even later write-downs based on that research.
The biofuels industry is in a similar phase, doing its best to accelerate the development of manufacturing technologies that are within cost and energy goals.
The biofuels industry has received significant government funding to continue this research, but the funding is in jeopardy as Congress wrestles with the Obama administration over budgets and, more to the point, tax incentives for corporations.
To make a long story short, the oil industry wants to keep tax incentives for biofuels research. It just doesn’t want that money to go to the biofuels researchers.
Here’s what I mean. A large percentage of alternative energy, biofuels and fuel cell research – perhaps a significant majority – is being conducted by traditional oil companies in the United States and elsewhere. Chevron has been particularly active in this respect.
These oil companies get government funding in the form of alternative energy research grants. They get tax write-offs for research. And then they get more write downs for expenses.
Smaller independent alternative energy research companies enjoy these same benefits, which makes them potentially competitive with the big oil companies. Worse, big oil doesn’t really want any of this research to see the light of day until traditional fossil fuels run out…that is, until all the profit has been wrung out of traditional fossil fuels and the demand for alternative energy sources is high enough to jack up the prices.
So big oil is hiding its alternative energy developments from all but a small group of tight-knit investment managers.
Meanwhile, mandates for alternative energy research have require the federal government to participate by purchasing alternative energy for vehicle fleets and military use, both to test out the viability of the projects and to further fund alternative energy projects.
Here’s the real rub: multinational oil companies have too many foreign ties to make them good candidates for alternative energy purchases by the government. There is too much red tape, there are too many national security issues, and there are too many sensitivities with respect to foreign diplomacy. So the preference is to secure contracts with independent biofuels researchers, not big oil companies.
In addition, if big oil were pressured into opening its biofuels research, it would have to reveal its developments, potentially forcing them to put their products on the market years ahead of strategy.
So lobbyists hit up the Defense Committee to get them to put a stop to the acquisitions, citing budget considerations.
Once again, the energy companies have thrown alternative energy research back, perhaps years back, in the quest to deliver reliable, high volume alternative fuels.