* High initial costs per gallon make fuels controversial
* Baucus says "freedom fuels" help get U.S. off foreign oil
* "Green energy" may challenge military readiness -Inhofe
By David Alexander
WASHINGTON, Nov 28 The U.S. Senate voted on
Wednesday to strike restrictions in its annual defense policy
bill that would have severely limited the military's effort to
develop biofuels for jets and warplanes.
The Senate voted 62-37 to remove language in the National
Defense Authorization Act that would have barred the military
from buying the controversial alternative fuels if they cost
more than petroleum.
The Senate is expected to vote on the NDAA in coming days.
After that, it must be reconciled with the version passed by the
House of Representatives, which contains limits on biofuels,
before going to President Barack Obama for his signature.
Supporters of alternative energy development welcomed the
"This would have been a terrible signal to private investors
if there had been a pullback from this program because what we
all want is for these advanced biofuels to become commercialized
and therefore cost competitive," said Phyllis Cuttino, director
of Clean Energy Program at the Pew Charitable Trusts.
"You're certainly not going to get there if private
investors think there is a kind of on-again, off-again policy."
Spending on biofuels by the different military services has
been controversial among lawmakers and the public because
production of initial test batches of the new fuels costs many
times more than petroleum.
The Air Force has been testing small batches of alternative
fuels in its aircraft to prove they can be reliably used once
prices become competitive with petroleum. It paid $59 per gallon
for 11,000 gallons for one test batch this year.
The Navy has a broader mandate to develop alternative fuels.
It spent $12 million for biofuels - more than $26 a gallon - to
power warships and aircraft as part of its "Great Green Fleet"
demonstration this summer.
Navy Secretary Ray Mabus has set a goal of using biofuels to
supply about half the Navy's non-nuclear fuel needs by 2020,
about 8 million barrels a year.
BACKLASH IN CONGRESS
He notes that biofuels could help insulate the Navy from oil
market price shocks. A one dollar increase in the price of a
barrel of oil boosts the Defense Department's fuel bill by $130
The military's focus on alternative energy sources provoked
a backlash in Congress this year among lawmakers concerned the
spending was misplaced at a time when tight budgets are forcing
reductions in military personnel and programs.
"What we're doing is trying to experiment in green energy at
the expense of our ability to defend America and our (military)
readiness," Republican Senator Jim Inhofe said in debate on the
Inhofe, who inserted the restrictions on biofuels into the
original bill, noted that the military has been ordered to cut
$487 billion in projected spending over the next decade and
faces the possibility of another $500 billion in cuts over that
period beginning in January.
"If that were not enough, the Obama administration continues
to force the military to spend greater proportions of its
already depleted funds on an expensive green energy agenda,"
But supporters of the military program noted that biofuel
development supported the farm economy, created jobs and helped
to insulate the military from price shocks in international oil
"I call these freedom fuels," said Democratic Senator Max
Baucus, whose home state of Montana is the source of some
biofuel feedstocks. "Why? Because they help get us off of
foreign oil and help bring good paying jobs to Montana."
Senator Jeanne Shaheen said the U.S. Defense Department, as
the largest single fuel consumer in the world, had a special
role to play in trying to develop alternative sources of fuel.
She said its participation in the market was helping drive
down the price of alternative energy sources.
"Advance biofuels are not yet in full production and so they
can't compete with oil, since the oil market is 100 years old,"
she said. "But DoD investment has caused the price to drop
dramatically over the last two years."