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December 05, 2011

Waste grease and algae for the Navy

The Navy today announced its making the biggest purchase of biofuels by the government to date. It’s for 450,000 gallons made from waste cooking oils from Dynamic Fuels in Louisiana and algae from Solazyme in California.

The total cost is $12 million, which works out to $26 a gallon.

The Navy plans to use it for surface ships and aircraft in a demonstration exercise next summer off Hawaii. “It’s half of what we were paying this time last year. It shows that as the market develops, you’re going to see see costs come down,” Navy Secretary Ray Mabus said on a conference call with reporters.

Mabus said the purchase is just a step but argued it’s an important one for reducing oil dependence and the budget shocks that come with buying oil from volatile places. He's been pushing for a few years for the military to create an early market for biofuels (previous story here).

Agriculture Secretary Tom Vilsack told reporters that another thing to consider in the cost-benefit analysis is the potential market for the commercial aviation industry at about 13 billion gallons of fuel a year. Vilsack said there’s a big opportunity for jobs in the future if the U.S. could supply its own non-petroleum fuel for commercial aviation and the military.

The Department of Defense budget for what it calls “energy security initiatives” has gone up to $1.2 billion. Biofuels are one of its top three programs, along with developing more fuel-efficient vehicles and adding energy efficiency and renewable energy at military bases and forward operating bases.

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