Senate panel approves defense bill with biofuels funds

WASHINGTON (Reuters) - A Senate subcommittee approved legislation on Tuesday that continues funding for the Pentagon's use of biofuels, a senator said, in a move pushing back against critics trying to limit outlays on programs such as the Navy's "Great Green Fleet."

Some biofuels funding was included in a $604 billion defense spending bill for fiscal 2013 passed by the Senate's defense appropriations subcommittee, the panel's chairman, Democratic Senator Daniel Inouye, told reporters.

"I think we do have funding for that," Inouye said. He did not give the amount, and committee aides said they could not provide details before Thursday, when the defense spending bill goes to the full appropriations committee for a vote.

A committee summary of the defense bill said it included increases in the area of alternative energy but gave no details.

Critics say that at a time when the U.S. military faces significant cuts, there is no room for Pentagon spending on testing expensive biofuels even if -- as the Obama administration says -- the goal is to curb reliance on foreign oil.

In the recent "Green Fleet" exercise, a group of U.S. warships and fighter jets burned an expensive blend of biofuels and petroleum. The Navy paid over $26 per gallon for biofuel made from renewable sources like algae and chicken fat.

In May, Republican critics of the biofuels plan pushed two proposals to limit military spending on biofuels through the Senate Armed Services Committee. House Republicans have also moved to curb the funding.

But Tuesday's vote by the defense appropriations subcommittee shows the biofuels critics may not have the last word in Congress. Biofuels supporters already have said they hope to alter the Armed Services committee's changes in action on the floor of the Democrat-majority Senate.

The defense appropriations legislation for fiscal 2013 that was approved by the committee also restored some other military programs that the Obama administration sought to cut. But it still came in $29 billion less than current defense spending, primarily due to the drawdown of U.S. troops in Afghanistan.

The legislation provides $511 billion for the Pentagon's "base" budget and another $93.3 billion for the war in Afghanistan for the fiscal year that begins on October 1.

It would restore $800 million that the administration had sought to cut from the U.S. Air Force. The appropriations subcommittee also reversed the Navy's proposal to prematurely retire seven cruisers and two amphibious ships, the committee summary of the legislation said.

Senator Richard Shelby, a Republican on the subcommittee, said the bill included money for the final year of development work on a joint ground-based missile defense program with Italy and Germany.

"This would enable us to meet our obligations with our European allies," Shelby said but did not reveal the amount.

Defense Secretary Leon Panetta had urged lawmakers to include $400.9 million for the program, known as the Medium Extended Air and Missile Defense System (MEADS) built by Lockheed Martin Corp and its partners in Italy and Germany.

(Reporting By Susan Cornwell; Editing by Kenneth Barry)