Obama Announces $510m for Biofuels

The Departments of Agriculture, Energy and Navy will invest up to $510 million over the next three years to produce advanced drop-in aviation and marine biofuels to power military and commercial transportation, President Obama announced yesterday.

Under the plan, companies will be invited to bid on biofuel projects and the government will match their investment, Reuters said. It said that projects would focus on fuels from wood chips and inedible parts of plants, as opposed to more traditional biofuels, such as those produced from corn..

The secretaries of the three departments published a memorandum of understanding (pdf) to jointly construct or retrofit several drop-in biofuel plants and refineries, helping to accelerate production of bio-based jet and diesel fuel.

The joint plan calls for the three Departments to invest a total of up to $510 million, which the administration said will require substantial cost share from private industry – of at least a one to one match.

The departments aim to reduce U.S. reliance on foreign oil and create jobs while positioning American companies and farmers to be global leaders in advanced biofuels production.  The United States spends more than $300 billion on imported crude oil per year, the administration said, but there is currently not enough manufacturing capability in the U.S. for next-generation drop-in biofuels.

“Biofuels are an important part of reducing America’s dependence on foreign oil and creating jobs here at home,” said President Obama. “But supporting biofuels cannot be the role of government alone. That’s why we’re partnering with the private sector to speed development of next-generation biofuels that will help us continue to take steps towards energy independence and strengthen communities across our country.”

“America’s long-term national security depends upon a commercially viable domestic biofuels market that will benefit taxpayers while simultaneously giving Sailors and Marines tactical and strategic advantages,” said Navy Secretary Ray Mabus. “Today’s announcement not only leverages our home grown fuel sources to support our national security, but it also helps advance the biofuels market, which ultimately brings down the cost of biofuels for everyone.”

In March, President Obama announced a plan to reduce oil imports by one-third by 2025.