Americas News
U.S. Navy: Biofuel Costs Comparable to Conventional Fuels
The U.S. Navy expects to get bids for biofuels for ships and aircraft that don't add up to more than what it pays for conventional fuels, Platts reports.
"We've got a very, very good set of analysis that shows us that it's going to be coming in under $3.50 a gallon," said Dennis McGinn, assistant secretary for energy, installations and environment.
"We are absolutely confident, and we are moving forward based on that assumption that it is going to be competitive with petroleum."
The Navy is looking for at least 37 million gallons of drop-in biofuels that can be blended with F-76 marine diesel and JP-5 jet fuel.
McGinn said the service typically pays more than $3.60 per gallon for the F-76 and JP-5 fuels.
At times, the Navy has paid up to $30 per gallon for biofuels, but that was for use in tests of ships and planes.
"That was money well spent that proved at the operational level that we could in fact operate our helicopters, our jets, our ships on bio-blends of up to 50%," McGinn said.
He added that, despite the current boom in U.S. oil and gas production, the abundance of those fuels will not last forever.
"In the national security business, we get paid for looking years down the road," he said. "And we see an environment globally where there's going to be increasing competition, increased cost for pulling petroleum out of the ground."
The costs of the biofuels, which will be delivered starting in April of 2015, may be partially defrayed with funding from the U.S. Department of Agriculture (USDA) if they contain certin domestic feedstocks.
