Obama Administration Announces New Investments to Advance Biofuels Industry and Enhance America’s Energy Security

July 2, 2012

As part of the Obama Administration’s commitment to deploying every available source of American energy and reducing our reliance on imported oil, U.S. Secretary of the Navy Ray Mabus, Secretary of Agriculture Tom Vilsack and Secretary of Energy Steven Chu announced new funding available to pursue new innovations in biofuels technologies, increase production of U.S. biofuels, and strengthen American energy security. The U.S. Department of Agriculture (USDA), Navy, and Department of Energy are announcing $30 million in federal funding to match private investments in commercial-scale advanced drop-in biofuels. The Energy Department is also announcing a total of $32 million in new investments for earlier stage research that will continue to drive technological breakthroughs and additional cost reductions in the industry.

Advancing Commercial-Scale Drop-In Biofuel Substitutes for Diesel and Jet Fuel

In his Blueprint for a Secure Energy Future released in March 2011, President Obama set a goal of reducing oil imports by one-third by 2025 and laid out an all-of-the-above energy plan to achieve that goal by developing domestic oil and gas energy resources, increasing energy efficiency, and speeding development of biofuels and other alternatives. Domestic oil and gas production has increased each year the President has been in office. At the same time we continue to take additional steps to reduce our reliance on foreign oil. As part of that effort, the Blueprint directed the Navy, USDA and DOE to collaborate to support commercialization of “drop-in” biofuel substitutes for diesel and jet fuel. Competitively-priced drop-in biofuels will help improve America’s energy security, meeting the fuel needs of U.S. armed forces, as well as the commercial aviation and shipping sectors. Today’s announcement of an available $30 million in funding builds on that commitment, helping to speed the development of biofuels for military and commercial transportation that will reduce the need for foreign oil and strengthen rural America. The Funding Opportunity Announcement (FOA) is available HERE.

Made possible through the Defense Production Act (DPA), this funding opportunity enhances national security by supporting the creation and commercial viability of a defense-critical domestic biofuels industry to advance alternatives to petroleum. DPA is an authority that dates back to 1950 and has been used to boost industries such as steel, aluminum, titanium, semiconductors, beryllium, and radiation-hardened electronics.

“DPA is a critical component of strengthening our national security, and energy is a national security issue,” stated Secretary Mabus. “Our reliance on foreign oil is a significant military vulnerability and it would be irresponsible not to address it. Pursuing a viable, domestic alternative is the best way to preserve the budget for operational necessities like training and shipbuilding, and this funding opportunity is an important step in accelerating an economically self-sufficient alternative fuels market.”

The FOA comprises a two-phased approach, with government and industry sharing in the cost. In Phase 1, applicants will submit a design package and comprehensive business plan for a commercial-scale biorefinery, identify and secure project sites and take additional required steps spelled out in the announcement. Awardees selected to continue into Phase 2 will submit additional information for the construction or retrofit of a biorefinery.

Agencies participating in this initiative will make additional funding requests to Congress to support the initiative, including President Obama’s FY 2013 budget request of $110 million.

“This is an important time for the biofuels industry to step up and show the Department of the Navy how they have developed biofuels that are certified and certifiable for military use,” stated Secretary Vilsack. “The ability for U.S. industry to make, create and innovate has never been more important to our national and energy security. I know that through this DPA effort the nation will be able to harvest an aviation biofuels industry to satisfy the world’s needs, not just our U.S. military.”

Investments in Biofuels Research, Development and Demonstration to Drive Cost Reductions, Technological Breakthroughs

Today, the Energy Department is also announcing new investments in earlier stage biofuels research that complement the commercial-scale efforts announced today by the Navy and USDA. Totaling $32 million, these early-stage, pre-commercial investments are the latest steps in the Obama Administration’s efforts to advance biofuels technologies to continue to bring down costs, improve performance, and identify new effective, non-food feedstocks and processing technologies.

“Advanced biofuels are an important part of President Obama’s all-of-the-above strategy to reduce America’s dependence on foreign oil and support American industries and American jobs,” said Secretary Chu. “By pursuing new processes and technologies for producing next-generation biofuels, we are working to accelerate innovation in a critical and growing sector that will help to improve U.S. energy security and protect our air and water.”

The funding announced by DOE today includes $20 million to support innovative pilot-scale and demonstration-scale biorefineries that could produce renewable biofuels that meet military specifications for jet fuel and shipboard diesel using a variety of non-food biomass feedstocks, waste-based materials and algae. These projects may support new plant construction, retrofits on existing U.S. biorefineries or operation at plants ready to begin production at the pilot- or pre-commercial scale. This investment will also help federal and local governments, private developers and industry collect accurate data on the cost of producing fuels made from biomass and waste feedstocks. The full funding solicitation is available HERE.

In addition, the Energy Department also announced $12 million to support up to eight projects focused on researching ways to develop biobased transportation fuels and products using synthetic biological processing. Synthetic biological processing offers an innovative technique to enable efficient, cost-saving conversion of non-food biomass to biofuels. These projects will develop novel biological systems that can enhance the breakdown of raw biomass feedstocks and assist in converting feedstocks into transportation fuels.

The projects will be led by small businesses, universities, national laboratories and industry and will seek to overcome various technical and scientific barriers to cost-competitive advanced biofuels and bioproducts. The full funding opportunity announcement is available HERE.

The new investments announced today build on the steps the Energy Department is already taking to push the boundaries of biofuel technologies and move towards commercial-scale production at refineries across the country. View a fact sheet on some of the Energy Department’s ongoing efforts HERE.