Natural Gas Supply Puts Damper On Renewable Energy

By Michael Bruno, Graham Warwick
Source: Aviation Week & Space Technology
July 29, 2013
Credit: U.S. NAVY

Projections that the U.S. will become all but self-sufficient in energy by 2035 have profound implications for an aviation fuels market in the early stages of moving from a dependence on petroleum to encompassing a wide and varied range of sources.

Abundant and inexpensive natural gas is making it more difficult for renewable energy sources to establish themselves in the U.S. The nascent biofuels industry is being affected, as gas can be converted to liquid fuels in the near term and in the longer term liquefied natural gas could be used directly in aircraft engines (see page 46). Some alternative-fuel start-ups have switched from biomass to natural gas.

The dynamic developments in the energy market have thrown a spotlight on the Obama administration's moves to use the buying power of the military to help foster an alternative-fuels marketplace with the goal of providing energy security by reducing reliance on imported oil. The Pentagon's role in scaling up biofuel production to commercial volumes is now in question.

As it did last year, conservative opposition is taking root in the Republican-controlled House of Representatives' National Defense Authorization Act for fiscal 2014, via several provisions that attempt to restrict or undo Pentagon spending on alternative fuels (AW&ST June 18, 2012, p. 40). And, like last year, there is practically no equivalent language in the Democratic-run Senate Armed Services Committee's version of the bill, meaning there will be a fight in congressional conference over the language when lawmakers meet to hash out a House-Senate compromise.

Last year, for the 2013 National Defense Authorization Act, most anti-alternative-fuels provisions were watered down or removed in conference—as Democrats and more biofuel-friendly Republicans outnumber the anti-alternative conservatives—and the Pentagon was allowed to inch ahead in its efforts. The Senate is expected to debate its defense authorization bill after its August break, and a compromise bill is not expected until the end of the year.

Conservative opponents of defense alternative-fuel spending assert that they are not against biofuel or other non-oil energy, and have no qualms about Army and Air Force efforts to prepare for future fuels. The Army has a broad aim of increasing the use of renewable energy, including on its helicopters, but has not adopted any specific alternative-fuel goals. The Air Force is certifying all aircraft to use a 50:50 blend of conventional and alternative fuels and preparing to acquire half its domestic aviation fuel from alternative sources including biomass by 2016.

But it is the Navy's goals that are drawing the most criticism from conservative lawmakers. Empowered by the Defense Production Act, the Navy has entered into a $510 million agreement with the Energy and Agriculture Departments to promote the development of a domestic advanced biofuel industry through the construction of biofuel refineries. The Navy's share is a $170 million investment, mainly in procurement of fuels to meet its goal of deploying a “Great Green Fleet” strike group of ships and aircraft running entirely on alternative blends by 2016, en route to meeting half of its total energy needs from alternative sources by 2020. To do so, the Navy would need to replace about 8 million barrels of petroleum with unblended alternative fuels by 2020, the Congressional Research Service (CRS) reported in December.

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