* Single largest US gov't purchase of biofuels
* The fuels cost $26 a gal, but price has dropped
WASHINGTON, Dec 5 The U.S. military, in the
largest ever government purchase of biofuel, bought a batch of
fuel made from chicken fat and algae that will be burned by the
Navy in war games next year, officials said on Monday.
The Defense Logistics Agency purchased 450,000 gallons of
fuel from Dynamic Fuels LLC, a Louisiana-based venture owned by
Tyson Foods Inc and Syntroleum Corp, which makes
biofuel from used cooking oil, and from California-based
Solazyme Inc , which makes fuel from algae.
"We are doing this for one simple reason, it makes us
better war fighters," Navy Secretary Ray Maybus told reporters
in a teleconference. "Our use of fossil fuels is a very real
threat to our national security and to the U.S. Navy's ability
to protect America and to project power overseas."
The U.S. government has looked for ways to boost domestic
energy production to wean the country off foreign oil, but the
effort has been costly.
The military paid $12 million, or about $26 a gallon for
the biofuel, far higher than the price of diesel fuel, which is
currently under $4 a gallon.
Maybus said the sky-high price was about half the amount
the military paid for the fuels last year, and that costs
should go down as the market develops.
Navy ships will use the animal fat oil while Navy aircraft
will burn the algae fuel during a demonstration at a Rim of the
Pacific Exercise, the world's largest war games, next summer
off the coast of Hawaii.
The fuel will be mixed in blends that are half biofuel and
half traditional petroleum fuels that will cost about $15 a
gallon. The biofuel is chemically identical to petroleum based
fuels Maybus said.
The amount of the biofuel purchased is a drop in the bucket
compared to the military's annual thirst for fuel. The Navy
alone burns some 1.26 billion gallons of fuel a year.
Several biofuel companies have collapsed in recent years
including Range Fuels, which received tens of millions of
dollars in U.S. loan guarantees and grants.
"Obviously there are going to be circumstances with new
technologies that may not work," said Vilsack.
But he said that is part of helping to get an industry
started. "I don't think we want to get to the point where we
are totally risk adverse here. This country was built on risk
The Navy demonstration could teach both the commercial
aviation industry and the military about how to incorporate
domestically made biofuels, and their potential to add jobs and
cut carbon emissions, Vilsack said.