WASHINGTON, July 3, 2012 -Despite strident criticism from Republicans in Congress over the U.S. military's pursuit of renewable alternative fuels for jets and vehicles, the Navy, USDA and DOE this morning announced the offer of more than $60 million in funding aimed at developing new biofuel technologies.

In a media conference call Monday, Agriculture Secretary Tom Vilsack and Secretary of the Navy Ray Mabus said the money being offered is both authorized and appropriated under laws adopted by Congress covering the current, 2012 fiscal year.

The point of where the funding is coming from was made in the face of charges by some in Congress that the military is paying too high a price at a time of fiscal limits. The military says the investments are needed to reduce U.S. dependence on foreign oil and to make advanced biofuels price competitive.

Mabus also maintained that despite the criticism on Capitol Hill, it's "early in the legislative process" for fiscal 2013 appropriations measures that include provisions barring the military from pursuing the alternative fuel technologies next year.

While the Senate Armed Services Committee adopted a measure similarly prescriptive to those adopted by the full House, military officials and industry advocates of advanced biofuels believe the Democrat-controlled Senate will likely reject the proposed limits on biofuel programs. President Obama has also threatened to veto the measures.

On Friday, USDA, the Navy and DOE announced $30 million in federal funding to match private investments in commercial-scale advanced drop-in biofuels. The DOE announced Monday that $32 million is being made available for new investments for "earlier stage" research – including pilot and demo facilities. Both moves are the latest steps in a joint, $510 million venture detailed by the three agencies last year to support commercialization of “drop-in” biofuel substitutes for diesel and jet fuel.

Mabus said the funding was made possible through the Defense Production Act (DPA), an authority dating back to 1950 that has been used to boost industries such as steel, aluminum, titanium, and semiconductors. He said the Defense Department's support of alternative fuels dates back to World War II when the U.S. military spent in excess of $350 million (in today's dollars) annually on developing synthetic fuels.

The announcement details a two-phased approach, with government and industry sharing in the cost. In the first phase, applicants need to submit a design package and comprehensive business plan for a commercial-scale biorefinery, and identify and secure project sites, along with other steps. Only those applicants selected from the first phase are eligible to continue into Phase 2 this fall, when they will be asked to submit additional information for the construction or retrofit of a biorefinery. The Energy Department said $20 million of the $32 million being offered will target early-stage, pre-commercial investments. The other $12 million will go toward eight projects focused on synthetic biological processing, a technique that scientists believe can efficiently and inexpensively convert raw, nonfood biomass feedstocks and into fuels.



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